(MENAFN- The Peninsula) British wholesale gas prices for the rest of this year fell yesterday after Ukraine and Russia signed a deal that will see Moscow resume gas supplies to Kiev this winter, while warm UK weather and high storage levels added to the bearish tone.
Russia is Europe's biggest supplier of gas and provides around a third of the continent's needs, pumping roughly half of that via Ukraine. Some of this reaches Britain from continental European storage sites.
Failure to reach an agreement would have raised fears of disruptions to European gas supply via Ukraine this winter, but prices of wholesale natural gas had already been declining on Thursday afternoon in anticipation of a deal.
The UK gas contract for delivery in November was trading at 52.20 pence per therm at 0915 GMT on Friday, down 1.5 percent from the previous settlement. It earlier touched 52.00 pence, its lowest since the contract began trading.
The December contract was at 54.60 pence per therm, down 1.7 percent, having touched its lowest ever level of 54.40 pence in earlier trade.
However, traders said the falls were not that substantial.
"Everyone was expecting this (deal) to happen so it's not going to have a massive impact on prices, although the near months have come off a bit," one gas trader said.
"There are no real bullish indicators out there. The long-term forecast for November and December is warm; storage is very high right across the continent," he added.
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.