British Gas Prices Drop

British wholesale natural gas prices fell on Thursday, as lower consumption and an improved import outlook for liquefied natural gas (LNG) took pressure off an undersupplied system, newsagencies reported.

Gas prices for day-ahead delivery as well as for delivery within the day both fell by 1.15 pence between Wednesday and Thursday morning to 64.35 and 64.45 pence per therm respectively. Analysts said that the drop was a result of lower demand.

Despite the lower gas demand and an improving LNG outlook, the system was expected to be undersupplied on Thursday, implying the need for gas storage withdrawals.

Gas demand was forecast to be 242.7 million cubic metres (mcm) on Thursday, around 5 percent below the seasonal norm, according to data from National Grid.

But with flows only seen at 233.4 mcm, the system would be 9.3 mcm short, requiring either imports from continental Europe, rising input of LNG into the system from Britain's import terminals or storage withdrawals.