3 Min Read
* Gas demand below seasonal average
* Healthy LNG imports
* But global events still support prices
LONDON, March 29 (Reuters) - British gas prices dropped slightly on Tuesday morning as the system was long due to healthy liquefied natural gas (LNG) imports and moderate demand, traders said.
Winter 2011/2012 gas forward prices were at 74.20 pence per therm at 0830 GMT, down around half a pence a day earlier.
Technical indicators for the contract also looked bearish, with moving average convergence-divergence (MACD) signal lines about to cross and the relative strength index (RSI) also indicating an overbought market. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ For a technical NBP Winter 11/12 gas graph, click here: here ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
Further at the front of the price curve, April contracts were down 0.7 pence since their opening to 61.80 pence per therm.
Gas for day-ahead delivery traded at 61.70 pence, slightly below its level of 62 pence on Monday.
"The gas system is long as demand is below seasonal norms and supply is ample, especially because of a lot of Qatari LNG coming to Britain," one utility gas trader said. [ID:nN28202764]
National Grid data showed gas demand at 293 million cubic metres (MCM), compared to a seasonal demand normal of 316.5 mcm.
With supply around 300 mcm, traders said they saw no imminent danger of supply squeezes and that prices had therefore eased off slightly. [LNG/TKUK]
Despite these bearish elements, overall price levels in the gas market remained high because of fundamental aspects such as the Japanese nuclear crisis, Libya's armed conflict, and because the uncertain prospects of Germany's nuclear power reactor fleet.
"The market remains nervous because of all the extraordinary events all around the world, so a day or two of good supply and low demand isn't going to change the overall market picture," another trader said.
In the over-the-counter power market prompt contracts traded broadly sideways as the overall market situation remained largely unchanged in the past 24 hours.
Baseload (24 hours supply) power for May was at 54.25 pounds per megawatt-hour (MWh), and day-ahead base was at 52.80 pounds per MWh.
Britain could also see higher exports to France and via the new BritNed cable, which is expected to start on Friday to cover additional demand from Germany. [ID:nLDE72F1DL] (Reporting by Henning Gloystein)