Prices fall despite undersupply as fundamentals still bearish

27 Jun, 2019

* Britain's day-ahead gas price fell 0.85 pence to 25.00 pence per therm by 0755 GMT.

* Within-day gas price fell 0.25 pence to 25.75 p per therm.

* The gas system was slightly undersupplied, with demand seen at 170.9 million cubic metres (mcm) and supply expected at 161.5 mcm, according to National Grid data.

* Flows along the Langeled pipeline from Norway fell by 10 mcm due to an unplanned outage at Aasta Hansteen, contributing to the undersupply.

* Send-out rates from LNG terminals also fell by 7 mcm to 13 mcm, although one tanker is scheduled to arrive in Britain on Friday.

* "Injections aren't actually that high at the moment (but) this has taken some length out of the system," said one trader, adding some investors might take profits before the ICE expiry.

* Others noted fundamentals remained the same, with strong supplies expected across Northern Europe.

* Norwegian flows to Britain are expected to increase next week due to the end of maintenance at the Troll gas field.

* Meanwhile LNG supplies to Europe are seen unabated as production rises and with Asian demand in June falling from May for the first time ever.

* "There still seems to be a problem to solve so realistically, gas needs to do something about it. The market hasn't done that yet," another trader said.

* Wind generation in Britain is forecast to rise to 5.5 gigawatts (GW) on Friday from 4.8 GW on Wednesday, Elexon data shows. Total UK wind capacity is 12.1 GW.

* British July contract fell 0.35 pence to 24.70 pence per therm, just off a 10-year low.

* The Dutch July contract, a key metric in global LNG price dynamics, fell 0.1 euro to 9.55 euros per megawatt hours, close to 10 year lows.

* Day-ahead gas price at the Dutch TTF hub fell 0.15 euro to 9.25 euros per MWh.

* Benchmark Dec-19 EU carbon contract fell 0.36 euro to 27.03 euros per tonne.

Copyright Reuters, 2019

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