Tests on Dutch gas link could spark fall in UK price:
Gas prices fell as lower-than-expected demand and plentiful supplies pushed down prompt and curve prices on Monday. The fall came on the day that Prime Minister Tony Blair officially opened the Langeled pipeline, which has been largely responsible for a slide in gas prices this month. Gas for Tuesday fell from an early opening level of 27.00 pence per therm to 23.75 pence, while within day gas fell 1.50 pence to 22.50 on modest demand in warmer-than-expected weather. "Demand is not really there," said one trader. "Everything is getting sold down." Late last week some weather forecasts had predicted that temperatures would be well below normal for the time of year this week. But traders said those forecast sub-zero temperatures were looking unlikely, given Monday's mild weather. They also said November gas seemed far too expensive given the amount of extra gas that should flow into the UK from next month with the commissioning of the new BBL pipeline from the Netherlands. "It looks very overvalued indeed without cold weather," a trader said. November gas fell more than 2.50 pence on Monday, hitting a low of 49.50 pence, while December fell by a similar amount to 64.50 pence. UK winter gas prices have been falling in the last few months as new import projects have boosted hopes that Britain will have enough gas this winter. In power, November baseload electricity fell by 1.40 pounds to 43.67 pounds per megawatt hour, while December baseload dropped 1.15 pounds to 53.20 in line with softer gas. 18.10.06