British wholesale gas prices fell on Tuesday as rising domestic supplies and stronger flows from LNG terminals left the market oversupplied, with weather warming towards the weekend.
Britain's gas system was oversupplied by 27 million cubic metres (mcm) per day, with demand forecast at 311 mcm and supply at 338 mcm, National Grid data showed.
Prices eased on the outlook of warmer weather and increased supply from liquefied natural gas (LNG) terminals, in addition to softer coal and carbon prices, Wayne Bryan from Alfa Energy said.
"We are easily coping with the current cold spell and that is giving us confidence we can manage cold spells without LNG and Rough (gas storage)," he added.
Gas withdrawals from Britain's largest gas storage have been restricted due to an ongoing outage.
Supplies rose as NSMP's gas terminal at St Fergus ramped up output following an outage on Nov. 5, and flows from LNG terminals rose to 14 mcm/day, double the volumes from last week.
"The continuation of higher LNG flows today strengthen the impression of a new and higher send-out level this month," analysts at Thomson Reuters said.
One LNG tanker was expected to arrive to the Isle of Grain terminal by Nov. 11.
The restart of North Morecombe (Barrow) gas terminal, which has a capacity of 7.7 mcm/day, was delayed again until Nov. 9 from Nov. 7, its operator Centrica said.
Temperatures in London and southeast England were forecast to rise towards the weekend by several degrees Celsius from maximum nine degrees on Tuesday, UK Met Office said.
Warmer weather means lower gas demand for heating.
In the power market, British baseload price for day-ahead delivery fell 39 percent to 91.50 pounds per megawatt hour (MWh) on Tuesday morning as French power prices came down.
Further along the gas curve, the British contract for gas delivery in December eased 1.25 pence, or 2.5 percent, to 49.60 pence/therm.
In the Netherlands, the day-ahead gas price at the TTF hub fell 0.4 euro, or 2.2 percent, to 17.48 euros/MWh.
In the European carbon market, the benchmark Dec. 2016 contract eased 0.1 euro to 6.13 euros a tonne.
Oil prices were stable on Tuesday as financial investors and traders were cautiously positioning themselves for a win by Hillary Clinton in the U.S. presidential elections.
(C) Reuters News
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