A decrease in UK prompt natural gas prices due to milder weather enabled long-range storage withdrawals to slow Wednesday, with several deliveries of LNG also expected to boost available supply, traders said.
"Flows from Rough have reduced due to lower prompt prices and the expectation of higher LNG flows. Several LNG cargoes are expected over the next few days into South Hook and Isle of Grain. This could restore some bearish sentiment in the market if Rough storage is not used at full capacity," a trader said.
"Weather forecasts are still the dominant driver of demand, especially domestic demand, with the outlook still unclear for the rest of February and March," the trader added.
Gas for immediate delivery was down 0.90 pence a therm on the day at 57.75 p/th at midday London time, while that for next-day delivery had shed 0.70 p/th to 57.70 p/th.
Despite opening around 8 million cubic meters short due to a reduction in flows from Norway and the lower storage withdrawals the system was 1 million cu m/day long on gas by lunchtime at around 374 million cu m/day, National Grid data showed.
Demand was just 1% or 5 million cu m/day above the seasonal normal compared with 25% higher than average in recent weeks, lowered by the milder weather which Customweather forecast at 3-4 degrees Celsius below the 3-8 C seasonal norm for the rest of the week.
Flows of gas from Norway through the Langeled pipeline were down 15 million cu m/day on the the day at 55 million cu m/day, while the contribution from LNG remained high at 95 million cu m/day flowing from all three UK terminals.
Local port data showed a number of LNG tankers expected to berth in the UK from Qatar in the next seven days, including the Al Mayeda on Wednesday, the Onida Friday and the Al Sad on Saturday, all into the largest of the UK's three LNG terminals, South Hook.
The Blue sky carrier is also expected to berth at the Dragon LNG terminal from Trinidad & Tobago on Tuesday.
Meanwhile, storage withdrawals from the long-range Rough facility were still much lower Wednesday at 20 million cu m/day -- over 50% lower than last week -- with flows dropping as low as 15 million cu m/day early in the session.
Traders said that as the lower domestic demand allowed this to happen. the UK was also relying less heavily on imports from Continental Europe. The website showed the UK-Belgium Interconnector was forecast to flow at 12 million cu m/day Wednesday morning, but market sources said this gradually decreased as the session progressed.
On the curve, prices also came off in line with the prompt, with the front-month shedding 0.85 p/th in value to change hands at 57.25 p/th by midday London time while the front-quarter fell 0.90 p/th to 54.20 p/th.
Natural gas for delivery in the summer was trading at a 0.80 p/th discount to Tuesday's close, although traders said the seasonal contracts were supported more further forward.
"Flows from Rough have reduced due to lower prompt prices and the expectation of higher LNG flows. Several LNG cargoes are expected over the next few days into South Hook and Isle of Grain. This could restore some bearish sentiment in the market if Rough storage is not used at full capacity," a trader said.
"Weather forecasts are still the dominant driver of demand, especially domestic demand, with the outlook still unclear for the rest of February and March," the trader added.
Gas for immediate delivery was down 0.90 pence a therm on the day at 57.75 p/th at midday London time, while that for next-day delivery had shed 0.70 p/th to 57.70 p/th.
Despite opening around 8 million cubic meters short due to a reduction in flows from Norway and the lower storage withdrawals the system was 1 million cu m/day long on gas by lunchtime at around 374 million cu m/day, National Grid data showed.
Demand was just 1% or 5 million cu m/day above the seasonal normal compared with 25% higher than average in recent weeks, lowered by the milder weather which Customweather forecast at 3-4 degrees Celsius below the 3-8 C seasonal norm for the rest of the week.
Flows of gas from Norway through the Langeled pipeline were down 15 million cu m/day on the the day at 55 million cu m/day, while the contribution from LNG remained high at 95 million cu m/day flowing from all three UK terminals.
Local port data showed a number of LNG tankers expected to berth in the UK from Qatar in the next seven days, including the Al Mayeda on Wednesday, the Onida Friday and the Al Sad on Saturday, all into the largest of the UK's three LNG terminals, South Hook.
The Blue sky carrier is also expected to berth at the Dragon LNG terminal from Trinidad & Tobago on Tuesday.
Meanwhile, storage withdrawals from the long-range Rough facility were still much lower Wednesday at 20 million cu m/day -- over 50% lower than last week -- with flows dropping as low as 15 million cu m/day early in the session.
Traders said that as the lower domestic demand allowed this to happen. the UK was also relying less heavily on imports from Continental Europe. The website showed the UK-Belgium Interconnector was forecast to flow at 12 million cu m/day Wednesday morning, but market sources said this gradually decreased as the session progressed.
On the curve, prices also came off in line with the prompt, with the front-month shedding 0.85 p/th in value to change hands at 57.25 p/th by midday London time while the front-quarter fell 0.90 p/th to 54.20 p/th.
Natural gas for delivery in the summer was trading at a 0.80 p/th discount to Tuesday's close, although traders said the seasonal contracts were supported more further forward.
