UK gas gains as pipeline flows fall, heating demand rises

  LONDON: British gas prices gained strongly on Tuesday morning as flows from pipelines fell, household heating dem
12 Feb, 2013

 

 

Gas for within-day delivery gained 0.45 pence to 67.60 pence per therm, while day-ahead gas rose 1.35 pence to 68.25 pence at 0955 GMT.

 

"There's less gas coming in through pipelines, and tenperatures are a little colder than some forecasts, so heating demand is higher," a UK gas trader said.

 

Demand for gas is expected to be 365 million cubic metres (mcm/day), while supply is forecast to be 342.9 mcm, leaving the system short by 22.1 mcm, according to data from National Grid.

 

Norway's main export pipeline to Britain, Langeled, was flowing at around 64 mcm/d, National Grid data showed, down from 70 mcm on Monday.

 

Supply through the IUK pipeline from Belgium fell to 6 mcm, a fall of 13 mcm from the previous day's levels.

 

Analysts at Reuters Point Carbon said restricted capacity at Norway's Troll field could mean that the Langeled pipeline will be more vulnerable to an increase in demand from continental Europe and other production problems, such as the fire at a processing plant seen at the weekend.

 

Average UK temperatures are forecast to be 1-3 degrees Celsius on Tuesday, with a similar range forecast for Wednesday, although the weather is expected to get a lot milder by Thursday, the Met Office said.

 

The March gas contract changed hands at 65.95 pence, up 0.40 pence on Monday's closing level.

 

Stronger prompt prices helped increase prices further along the curve, where the benchmark front-season gas contract gained 0.20 pence to 63.50 pence.

 

Brent crude futures held above $118 a barrel on Tuesday in thin trade due to Lunar New Year holidays in Asia, with the market showing little reaction to news of a North Korean nuclear test and awaiting weekly data on US oil stocks.

 

In Britain's over-the-counter power market, contracts traded lower, with day-ahead baseload electricity falling 3.25 pounds to 49.50 pounds per megawatt-hour (MWh).

Copyright Reuters, 2013

 

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