Free Market Works: UK Gas Prices Fall For Longest Period Since 2007
The largest deliveries of liquefied natural gas cargoes to the U.K. in a year are sending prices for the day-ahead fuel in Europe’s biggest market to a sixth monthly decline, the longest losing streak since at least 2007.
The day-ahead contract on the National Balancing Point gas hub dropped to the lowest since October 2011, heading for an 8.2 percent drop this month, broker data compiled by Bloomberg showed. Ten cargoes from Qatar arrived at the U.K.’s South Hook terminal this month, the most in a year, according to port authorities and ship-tracking data on Bloomberg.
LNG arrivals are helping offset reduced flows due to annual gas field maintenance as well as cooler-than-normal weather across northwest Europe. Supplies are set to exceed demand by 10.6 million cubic meters by 6 a.m. tomorrow, according to National Grid Plc, the network operator.
“We have seen that LNG input is strong and with six tankers over the next two weeks, one would say this is set to remain or push even lower,” Nick Campbell, an analyst at consultant Inspired Energy Plc (INSE) in Kirkham, England, said by e-mail today. This week was “the first time we saw potential supply side issues with maintenance.”