UK gas falls as strong supply outweighs Japan deal
LONDON, April 18 (Reuters) - British gas prices fell on Monday, ignoring leading liquefied natural gas supplier Qatar's sale of 4 million tonnes LNG to Japan, as plentiful supply swelled stocks and soft oil weighed on the curve, traders said.
Qatargas, which has become one of Britain's biggest suppliers over the last year, said on Saturday it would send more than 60 extra LNG cargoes, or 4 million tonnes, to Japan over next 12 months. [ID:nLDE73F046]
The deal means there will probably be less coming to Europe from Qatar than the large amounts expected before Japan's nuclear crisis. But UK contracts for next winter fell over a penny to 71.75 pence per therm by 1000 GMT and front month May fell 1.35 pence to 58.10 pence ($9.51 per mmbtu).
A growing number of LNG tankers heading for Britain over the weekend indicated plenty of gas should be available to put into storage early in summer ready for peak demand days next winter, while weaker oil keeps a lid on continental European prices.
"I think it's not altogether unexpected," one UK trader said of the fall in gas prices.
"The market generally expects some limited downside at front with strong supply."
After shrinking over the last couple of weeks, the list of LNG tankers heading for Britain grew again over the weekend [LNG/TKUK].
European gas market analysts said softer crude prices, with Brent down about 0.65 percent at $122.65 a barrel at 0930 GMT Monday, had likely dragged down UK gas prices for next winter.
The fall following the Qatar sales news, could be traders selling after a strong rally at the end of last week which had been driven by expectations Japan would need much more LNG. [ID:nLDE73E1SN] Continued...