2014 Q3


Prices on the NBP gas market took a dive yesterday as a ramp up in flows from mainland Europe and falling demand kept the system balanced. The fall was less pronounced on the Weekend and WDNW contracts, however, as concerns still remain over the lack of storage and the cold weather forecast keeping demand high; temperatures next week are expected to remain below seasonal normal, possibly as much as 5 degrees below. Yesterday's session saw BBL flows ramp up to 40mcm in the morning, after having only been flowing around 20mcm for the last few days. Over the entire session the BBL pipeline averaged 36mcm whilst the Interconnector was importing 54mcm, meaning imports from both Belgium and the Netherlands were strong. Imports from Norway, however, were decreased by 16mcm which Statoil announced in the morning of yesterday's session. A further announcement this morning states that availability is now increased by 4.4mcm. Although prompt prices took a tumble yesterday they still remained well above the front month, therefore incentivising storage withdrawals; gas was flowing from Rough at near maximum, and small amounts of gas were coming from medium range storage sites too. However, as demand ticked lower during the day as did the storage withdrawals. Concerns over the ability of Rough to continue flowing at maximum rate still remain, as the facility hasn't been this empty since winter 2009.