The last time this happened was a decade ago in the aftermath of the global financial crisis of 2007/08.
The U.S. Henry Hub gas price is usually considered the floor for European gas prices. The drop in UK gas below the U.S. price has made it not only the cheapest in Europe but globally.
The May contract on the UK's National Balancing Point (NBP) hub closed on Monday at $1.72 per million British thermal units (mmBtu), $0.20 below U.S. Henry Hub May futures , Refinitiv price data showed.
On Tuesday, the UK contract shed more value, trading around $1.63 per mmBtu in the afternoon.
"Today there was another realisation that demand has been affected globally and there is concern about a second wave of COVID-19 and social distancing measures could last for at least 12 months," said Wayne Bryan, director of European gas research at Refinitiv.
In continental Europe, prices are at premium to the NBP.
On the Dutch market, the most liquid in Europe, the May contract closed slightly above $2 per mmBtu on Monday and fell to about $1.90 per mmBtu on Tuesday, Refinitiv data showed.
In Asia, liquefied natural gas (LNG) prices are slightly above $2 per mmBtu.
"UK natural gas demand in April has been very low due to lockdowns," said Carlos Torres-Diaz, head of gas and power markets at consultancy Rystad Energy.
"So far, demand from the power sector has dropped 34 per cent from March to April and 8 per cent in the industrial sector. The drop in total demand has now been exacerbated as the weather has turned warmer and windier resulting in even less gas demand for power and in the residential sector."
In the United States, industrial demand remained strong despite the coronavirus crisis and the market remained balanced, with strong injections into storage, Torres-Diaz added.
Another reason for the weak UK prices is the continued arrival of liquefied natural gas (LNG) cargoes to Britain.
"LNG will be strong again (in May) with no possibility to cancel cargoes as it's too late to meet deadlines," one gas trader said.
Qatari arrivals have been strong, with cargoes that cannot find a home in Asia being delivered to Europe, mostly to Britain, gas traders said.
A total of 12 cargoes from Qatar are expected to be discharged in Britain by the end of the month, two more than in April 2019, Refinitiv data showed.
Four cargoes from the United States arrived in Britain this month, compared with one in April 2019, but there have been no cargoes since April 9.
"If you look at the absolute price and the production costs, then it is clear that less (U.S.) LNG will come," a gas trader said.
