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UK GAS-Prices decline after Naftogaz pays first gas debt tranche

LONDON, Nov 5 (Reuters) - British wholesale gas prices fell on Wednesday after Naftogaz's first debt repayment to Gazprom eased disruption concerns, overshadowing domestic undersupply.

* December gas down 0.48 pence at 53.90 pence/therm

LONDON Nov 5 (Reuters) - British wholesale gas prices fell on Wednesday after Naftogaz's first debt repayment to Gazprom eased disruption concerns, overshadowing domestic undersupply.

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Gas for delivery on Thursday (day-ahead) was down 0.30 pence or 0.57 percent at 52.70 pence per therm at 0932 GMT.

Further along the curve, December gas was down 0.48 pence at 53.90 pence per therm, and gas for the first quarter next year declined by 0.30 pence to 55.05 pence per therm.

Before Russia and Ukraine reached a temporary agreement last week on gas supply, gas traders feared a new gas war could disrupt winter supplies to EU states.

The EU receives about a third of its gas from Russia and about half of that is piped across Ukraine.

Russian natural gas producer Gazprom said on Wednesday it had received $1.45 billion from Ukrainian energy firm Naftogaz in repayment for unpaid debt, the first step towards Russia resuming gas supplies to Ukraine.

"There's some relief about that in the market as some needed to see it to believe it," one gas trader said.

"This winter might be safe (from gas supply disruption) but who knows about the next?," he added.

The British gas system was undersupplied by around 6 million cubic metres (mcm) of gas on Wednesday morning .

Demand was seen at 252 mcm, around 19 mcm over normal seasonal demand, and flows were forecast to be 246 mcm/day, according to National Grid data.

Flows from Norway through the Langeled pipeline were higher on Wednesday after an outage at the Kollsnes gas field ended.

Prices also moved lower in the Dutch gas market.

The day-ahead TTF gas price was 0.20 euros ($0.25) lower at 22.05 euros per megawatt hour (MWh), and the December contract was down 0.13 euros at 22.77 euros per MWh.

The benchmark European Union carbon price was steady, trading 0.01 euros higher at 6.49 euros a tonne on ICE Futures Europe. (1 US dollar = 0.8013 euro) (Reporting by Nina Chestney, editing by Louise Heavens)

Reuters
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Reuters
Published on:
November 6, 2014
Source url:
http://feeds.reuters.com/~r/reuters/USenergyNews/~3/8b_5AjjVLZo/story01.htm
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