Belgium: Day-ahead basis narrows on tightness at the UK's NBP natural gas hub
Outright prompt contracts at the Zeebrugge natural gas hub continued to shed value on Tuesday, as a result of healthy volumes of gas flowing from the UK to Belgium and a slight uptick in forecasted temperatures. While the outright Day-ahead closed 0.10p/th below Monday's equivalent, movement at Britain's NBP was bullish, narrowing the spread between the two markets to -0.25p/th.
Market participants pointed to an unexpected shutdown of the South Morecambe gas field as the primary bullish factor at the NBP, which was further exacerbated by a reduction of Dutch imports into the NBP via the BBL.
Despite a tight UK system, nominated volumes on the bi-directional Interconnector were up by 14.8Mm³ day on day to 35.7Mm³ on Tuesday, from 20.9Mm³ on Monday , according to data from IUK. Projected volumes for Wednesday stood considerably lower at 18:00 London time, at 21.8Mm³.
The latest weather map from forecaster WSI shows temperatures gradually warming across mainland Europe. Conditions are set to remain fractionally below average in Belgium until 22 April, but traders seem confident that the worst of the cold weather is now over.
Near-curve outright contracts remained fairly stable day on day, with traders preferring for the most part to focus their attention on the spot.
Late session losses on the Brent crude front month weighed bearishly on the Winter '12 outright contract at Zeebrugge, which shed 0.25p/th day on day. TH
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