Platts announces U.K., European natural gas prices dropped further in June

July 3, 2014

Day-ahead natural gas prices in the U.K. and continental Europe continued to fall in June after reaching multi-year lows in May, according to data just released by Platts, a leading global energy, petrochemicals and metals information provider.

U.K. day-ahead natural gas prices were down 13% month over month and down 35% year over year, while day-ahead gas prices on the Dutch TTF – continental Europe's most liquid natural gas trading hub – were down 9% month over month and 34% year over year.

European natural gas demand in Platts' sample of the U.K., Belgium, Italy, the Netherlands and France fell 11% from May's 14.9 billion cubic meters (Bcm) to June's 13.3 Bcm. On a yearly comparison, demand for the sample markets in June was down 1% from 13.5 Bcm in June 2013.

"The continued slide in U.K. spot gas prices came on the back of high storage levels and ample supplies, including the regular deliveries of liquefied natural gas from Qatar," said Alex Froley, Platts energy analyst. "Also, export potential for U.K. gas was hampered midmonth by a two-week outage of the U.K.-Belgium Interconnector pipeline."

Lower gas prices have been encouraging the use of natural gas-fired generation in the U.K. Gas-fired power plants consumed an average 48 million cubic meters per day in June 2014, up 14% from June last year, and the highest total since February 2013.

In the electricity markets, Platts Continental Power Index* (CONTI) fell 2.75% in June to €31.82 per megawatt hour (/MWh). This compared to the May level of €32.72/MWh and is down more than 7% year over year.

Copyright, Platts, 2014.