UK natural gas for next-day delivery is heading for the longest monthly losing streak on record since at least 2007 as arrivals of tankers with liquefied natural gas boosted supply amid North Sea field maintenance and outages.
The day-ahead contract on the National Balancing Point hub dropped as much as 2.5% to the lowest level since Oct. 3, 2011, heading for an 8.5% drop this month, according to broker data on Bloomberg. It’s the sixth consecutive monthly decline, the longest streak since Bloomberg began compiling data in September 2007.
“It was an interesting week as it was the first time we saw potential supply side issues with maintenance ” Nick Campbell, an analyst at consultant Inspired Energy Plc in Kirkham, England, said by e-mail today.
“We have seen that LNG input is strong and with six tankers over the next two weeks, one would say this set to remain or push even lower.”
Planned maintenance at fields and facilities in Norway, including at the Nyhamna plant that processes gas from the Ormen Lange field, curbed supply from the U.K.’s biggest foreign supplier. ConocoPhillips has had four unplanned outages at its J-Block field in the North Sea this month. Four LNG tankers will arrive in the U.K. from today through June 8, with 2 tankers expected to dock at Belgium’s Zeebrugge on June 3 and June 14. Ten tankers arrived in the U.K. in May, the most in a year, according to port and ship-tracking data compiled by Bloomberg.
The day-ahead contract dropped to as low as 42.25 pence a therm and was 1.7% lower at 42.6 pence a therm by 10:21 a.m. in London, broker data show.
Gas for July delivery was little changed at 44.3 pence a therm, according to ICE Futures Europe.
U.K. demand, including exports, storage and power generation, is forecast at 189 million cubic meters through 6 a.m. tomorrow compared with a seasonal norm of 191 million cubic meters, according to National Grid Plc. data.
Flows into the U.K. system were at 198 million cubic meters today, compared with a 10-day average of 196 million cubic meters. Norwegian flows are at 44.4 million cubic meters, up from as low as 15.5 million cubic meters on May 27, Gassco AS data show.
Exports to Belgium were nominated at 26.4 million cubic meters today, down from 28.44 million cubic meters yesterday, according to data from Interconnector (U.K.) Ltd.
Average U.K. temperatures will be 14 degrees Celsius next week, compared with a seasonal norm of 13.8 degrees, according to WSI Corp. data using the ECMWF model.
Russian, Ukrainian and European Union officials are meeting in Berlin today for talks on Ukraine’s gas debt and payments for supplies to OAO Gazprom, the Moscow-based gas exporter.