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UK GAS-Prices fall as Langeled pipeline flows return to normal

British wholesale gas prices fell on Monday morning, after steep gains on Friday, as flows from Norway through the Langeled pipeline returned to normal.

* British wholesale gas for day-ahead delivery fell by nearly 4 percent to 38.75 pence per therm at 0807 GMT, while gas for immediate delivery was down nearly 5 percent, also at 38.75 p/therm.

* May contract dropped by 6 percent to 39.00 p/therm.

* “There has been a correction after Langeled supply has come back,” a gas trader said.

* Flows from Norway through the Langeled pipeline have returned to around 65 million cubic metres (mcm) a day, after a sharp reduction on Friday which led to prices jumping.

* “We experienced a slowdown in Langeled on Friday morning (20 mcm), pushing the price of UK gas up quite sharply,” Refintiv gas analysts said.

* “The upside was likely strong because so many short positions needed to be closed. Langeled had flows of 64 mcm over the weekend, with total Norwegian at 87mcm. this is an increase of 43 mcm from Friday morning, indicating that Troll (field) was turned down, then up,” they added.

* The system is oversupplied with flows forecast at around 268 million cubic metres (mcm) and demand at 257 mcm, National Grid data shows.

* Liquefied natural gas (LNG) supply remains strong with several tankers due to arrive in northwest Europe over the next week.

* On the demand side, the latest average temperature forecast for the next 15 days shows a 0.7 degree Celsius decline from the previous forecast.

* In the Dutch gas market, gas for May delivery was down 4.7 percent at 15.73 euros per megawatt hour.

* In the EU carbon market, benchmark Dec-19 contract was 0.53 euro lower at 24.07 euros a tonne.
Source: Reuters (Reporting by Nina Chestney)

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