Gas for next day delivery recovered from its lowest level since May, changing hands 1.60 p/th higher than Wednesday's close at 40 p/th by 10:30 London time, while the within-day contract also dealt at 40 p/th, up 2.80 p/th.
The system was long for the whole of Wednesday's session but opened slightly short on Thursday, with National Grid forecasting supplies for the day at 230 million cubic meters a day, against demand at 233 million cu m/d.
One reason for the system shortage appeared to be a 15 million cu m/d reduction in Norwegian flows to the UK through the Langeled pipeline.
On Wednesday traders were expecting a reduction in flows but there was a sudden 10 million cu m/d rise to 40 million cu m/d, despite maintenance at the Karsto terminal starting as planned.
It seemed there was a delayed reaction on the pipeline and flows resumed at a lower pace of 25 million cu m/d Thursday morning.
The second contributor to the bullish sentiment could have been St. Fergus Mobil where flows fell to zero suddenly around 08:00 London time after running steadily at 23 million cu m/d throughout Wednesday.
Exxonmobil was unavailable for comment on the outage.
Traders were also surprised Wednesday that LNG did not react more aggressively to the healthy supply situation, by reducing output. There were some expectations this might happen Thursday.
However, even though Dragon LNG remained unavailable to the system South Hook LNG was outputting at a healthy level of 35 million cu m/d and Isle of Grain was flowing LNG at a rate of 9 million cu m/d Thursday morning.
China Chemical Weekly: http://news.chemnet.com/en/detail-1403616.html
