UK NBP natural gas spot ptices rise on short system, weaker pound against euro

London (Platts)--13 Jun 2018 637 am EDT/1037 GMT

UK wholesale natural gas contracts found support in early midweek trade from a short UK gas system and higher-than-expected demand as well as further falls in the pound against the euro.

  • Strong MRS injections boost UK gas demand
  • Gas system seen short as a result
  • Pound weakens further against the euro

With the annual Interconnector shutdown having begun Wednesday -- due to last 14 days according to IUK -- medium-range storage reservoirs have ramped up injections due to the inability of the UK to export gas to Continental Europe.

Data from S&P Global Platts Analytics showed that medium-range injection demand was nominated at 46 million cu m for Wednesday's gas day -- medium-range reservoirs withdrew a net 14 million cu m from storage during Tuesday's gas day.

Medium-range stocks combined began Tuesday's gas day at 352 million cu m, about 28% of full capacity, data from National Grid showed.

As a result of the strong injection demand, total UK gas demand for Wednesday's gas day was higher than expected at 160 million cu m according to Grid 10:00 am (0900 GMT) figures, and with physical flows running at 148 million cu m/d, the system was seen 12 million cu m short as a result.

NBP spot contracts were supported by the short system, with the within-day and day-ahead contracts trading at 55.675 pence/therm and 55.325 p/th respectively Wednesday morning comparison with the previous day-ahead assessment of an even 54 p/th.

Flows via the Teesside PX terminal restarted Wednesday morning after maintenance work ended, running at 4 million cu m/d.

Norwegian gas flows into the UK National Transmission System were running at 62 million cu m/d Wednesday morning, Norwegian gas operator Gassco reported.

On the NBP curve, further bullish sentiment came from the pound weakening further against the euro Wednesday morning.

The July contract was seen trading at 55.77 p/th compared with the previous assessment of 55.175 p/th, with the Q3 2018 and Winter 18 contracts dealt at 56.59 p/th and 63.70 p/th, respectively.

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