UK Gas Prices Flop on Robust Supplies

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UK Gas Prices Flop on Robust Supplies

The prices of natural gas in UK flopped for a second day as delivery of the liquefied fuel boosted inventories, minimizing immediate exposure by the worsening Ukraine conflict.

August-delivery contract in the UK, the biggest market in Europe, shed as much as 2.1% after losing 4% at the close of trading on July 18. The contract soared 6.9% the day earlier, the highest increase since April 7, after the shooting down of a Malaysian Airline’s jet over an eastern Ukraine area controlled by rebels threatened to worsen the crisis between the West and Russia. Europe buys most of its gas supplies from Russia.

Stockpiles in the European Union’s 28 member states had 76% of their capacities filled by yesterday, compared with 53% the previous year, data from Gas Infrastructure Europe showed. The South Hook LNG terminal was delivering 25% of all supplies into the UK after the facility received the Shagra tanker in Wales on July 19.

“A rise in LNG send outs from South Hook toward recent averages following the docking of the Shagra on Saturday, together with lower storage injections, are leaving the system well supplied. The high levels of storage stocks across Europe continue to pressure prices, with increased likelihood that these will be filled over the coming weeks,” Wingas UK Ltd is quoted by Bloomberg as saying.

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Current total shipments into UK stand at 160 million cubic meters.

Winter gas for settlement in the six months from October declined 1.7% to 57.5 pence per therm. According to Yahoo News, spot natural gas prices in UK were lower on Monday. Gas prices for delivery within one day were exchanging at 37.45 pence or $0.64 per therm as of 0903 GMT, down 0.65 pence hit at the close of trading on Friday. Tuesday-delivery gas went down 0.25 pence to trade at 37.50 pence per therm.

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To contact the reporter of this story; Jonathan Millet at john