• Maintenance in Norway that cut supply ends, boosting flows
  • Same-day gas last week reached highest since December on cuts

Norwegian natural gas has whipsawed prices in the U.K. once again.

After maintenance on gas facilities in Norway cut supply last week, pushing natural gas prices to a six-month high, an end to most of the work sent them to a two-month low. Same-day gas in the U.K. fell as much as 11 percent Monday, its biggest decline since April 7, according to broker data compiled by Bloomberg. 

Flows from Norway, the largest foreign supplier of gas to the U.K., rose to their highest since April 29 after the end of maintenance work and unexpected “process problems” that caused additional shutdowns over the weekend. 

“We are seeing a classic case of mean reversion of the products pricing following the cessation of supply-side issues created by heavy Norwegian maintenance ,” said Nick Campbell, an energy risk manager at Inspired Energy Solutions said by e-mail. An end to outages has “helped turn the sentiment bearish.”

Output at Troll, the biggest gas producing field in Norway, was cut 47 million cubic meters (1.7 billion cubic feet) a day on Friday, while work at a gas processing plant on the coast and two other gas fields reduced flows by more than 40 million cubic meters. That compares with average Norwegian gas supply to the U.K. of 83 million cubic meters a day during the last year.

Price Drop

Same-day gas fell as low as 32.2 pence a therm ($4.55 a million British thermal units) before trading 9.9 percent lower at 32.45 pence by 10:08 a.m. London time, according to broker data compiled by Bloomberg. The contract for next month declined 1.7 percent to 32.3 pence a therm on the ICE Futures Europe exchange.

The U.K. gas system started the day oversupplied as system operator National Grid Plc forecast demand at about 177 million cubic meters, about 20 million cubic meters less than its estimate for supply.

Additionally, a cold spell that boosted demand last week has ended, with temperatures returning to near-normal levels, according to data from The Weather Co.

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