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UK gas prompt prices nudge higher on colder weather forecasts

British prompt natural gas prices edged higher on Tuesday on expectations cooler weather will return, although solid supplies kept the rise in check.

Prices for within-day delivery were trading at 44.68 pence per therm at 0922 GMT, up 0.18 pence since their last settlement. Prices for delivery on Wednesday were up 0.15 pence at 44.75 pence per therm.

"Prompt prices have again opened stronger, taking direction from the declining temperature forecast for the remainder of January," said Marcel Boonaert, head of gas trading at Wingas UK.

Meteorologists forecast temperatures in Britain would drop by the end of the week.

"During the weekend the temperatures will be as low as around 0 degrees in northern England and 2-4 degrees C in the middle and southern parts," meteorologists at the Swedish Meteorological and Hydrological Institute said in a daily update on Tuesday.

However, other traders noted good supplies of gas were keeping a lid on prices.

With supply flows at about 293.4 million cubic metres (mcm) per day on Tuesday and demand expected to be about 288.3 mcm, the system was 5.1 mcm oversupplied, National Grid data showed.

Gas supply from Norway was expected to rise on Tuesday after an unplanned outage at the country's biggest natural gas field Troll, ended early on Tuesday morning.

The outage, which had reduced output by 15 million cubic metres (mcm) on Monday, ended at 0600 CET on Tuesday, operator Gassco said on its website.

Further along the curve, gas for February delivery was flat at 45.05 pence per therm and the Summer 15 contract was up 0.10 pence at 42.00 pence per therm.

In the Netherlands, the day-ahead gas price at the TTF hub was 0.10 euros higher at 19.60 euros per megawatt-hour (MWh).

The benchmark European Union carbon price was flat at 6.93 euros a tonne on ICE Futures Europe.

Business Recorder
Published on:
January 27, 2015
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