UK wholesale gas prices saw firm losses Tuesday morning following an oversupplied system, aided by imports across the bi-directional Interconnector pipeline, while weaker oil prices added to the bearish impetus.
At 1100 GMT, the within-day and day-ahead contracts were valued at 32.35 pence/therm and 32.60 p/th, down from a day-ahead close of 33.85 p/th Monday.
The UK's gas network was oversupplied to the tune of 25.50 million cu m at 1000 GMT, with demand for the day pegged at 312.1 million cu m, with additional supply coming from a range of sources.
The Interconnector pipeline was nominated to bring in 7.8 million cu m/d of gas to the UK Tuesday, after flipping to import mode Sunday in a first since March, with volumes of 0.9 million cu m/d and 1.2 million cu m/d Monday and Tuesday, Eclipse Energy, an analytics unit of Platts, showed.
The change in direction came while the UK day-ahead contract was valued at a 2.05 p/th premium over Belgium's Zeebrugge beach hub Monday.
Other sources of increased supply included a step up in flows across the Dutch BBL pipeline (plus 4.5 million cu m on the day to 23.4 million cu m/d), the Norwegian Langeled pipeline (plus 2.1 million cu m to 70.4 million cu m/d), LNG terminal sendout (plus 4.7 million cu m to 31 million cu m/d) and medium range storage sendout (plus 3.4 million cu m to 14.9 million cu m), Eclipse showed.
On the demand side, power station draw for gas was expected to fall from nominations of 53.7 million cu m/d for Monday to 45.5 million cu m/d Tuesday, while LDZ offtake was expected to increase from 228.7 million cu m/d to 329.4 million cu m/d.
Gas prices were also lower further along the curve.
The February price dropped from Monday's close of 33.85 p/th to trade at 32.76 p/th while Summer 16 broke through the 30 p/th mark to trade at 29.65 p/th, down from a close of 30.50 p/th Monday.
