April 5, 2012 / 9:59 AM / 5 years ago

UK gas prices rise on colder weather forecast

LONDON, April 5 (Reuters) - UK prompt gas prices rose on
Thursday morning as colder weather was expected to raise heating
demand across the country ahead of the Easter weekend.	
    The UK's MetOffice said that it expected "dry and cold
overnight" conditions "with widespread frost developing (and)
minimum temperatures (of) -5 degrees Celsius".	
    For Friday the MetOffice said it expected a cold and frosty
start and maximum temperatures of 13 degrees.	
    Gas demand in the UK was expected to be around 286.6 million
cubic metres (mcm) on Thursday, according to National Grid.	
    While this was still almost 4 percent below the seasonal
norm, it was up from almost 20 percent below average at the
beginning of April.	
    But with gas flows only expected to come in just above 281
mcm, the system was expected to be around 2 percent
undersupplied, implying the need for storage withdrawals or gas
imports.	
    UK gas storage sites were filled to an average of just under
60 percent on Wednesday, down from above 60 percent earlier this
week, according to Gas Infrastructure Europe.	
    But UK gas storage levels remain higher than the European
average of 42.75 percent, and traders said that the system was
stable.	
    "It is true that gas demand is up and supplies are a bit
constrained, but the UK system remains stable," one gas trader
said.	
    As a result, spot gas prices rose only slightly, with
day-ahead contracts trading around 59.90 pence ($0.95) per therm
at 0900 GMT (1000 BST), up 0.65 pence since Wednesday afternoon.	
    Within-day gas was trading at 60 pence, up 0.3 pence a
therm.	
    Point Carbon gas analysts said they were slightly bearish in
their price expectations for day-ahead contracts, forecasting
NBP spot gas prices of 58.60 to 60.50 pence per therm.	
    British power prices for next-day baseload (24 hours)
delivery slipped further from 46.70 pounds per megawatt-hour
(MWh) on Wednesday to 46 pounds a MWh on Thursday morning as
electricity demand was expected to fall significantly on
Easter's Good Friday, which is a public holiday in the UK and
large parts of Europe.	
    	
    TECHNICALS	
    Further out on the price curve, benchmark UK NBP winter 2012
gas prices found some technical support following sharp price
falls earlier this week.	
    The product dropped to its 50 exponential daily moving
average (DMA) marker just above 72.50 pence per therm on
Wednesday, but technical buying then lifted the contract back to
72.90 pence on Thursday morning.	
 	
($1 = 0.6300 British pounds)	
	
 (editing by Jane Baird)

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