January 11, 2017 / 10:07 AM / 7 months ago

UK GAS-Prices rise as cold weather boosts storage withdrawals

2 Min Read

* Demand expected to rise as temperatures fall

* Analysts expect high storage withdrawals next week

Jan 11 (Reuters) - British day-ahead gas prices rose on Wednesday morning on expectations that colder weather would boost demand for gas and prompt withdrawals from storages.

Gas for day-ahead delivery gained 0.85 pence at 54.25 pence per therm at 0951 GMT.

"Demand is up again because colder weather is coming tomorrow and into next week," a gas trader said.

Cold weather and the expectation of more withdrawals from storage to meet demand later this and next week were the main price drivers on Wednesday, analysts at Thomson Reuters said.

They expect around 180 million cubic metres (mcm) could be withdrawn next week.

The UK Met Office said daytime temperatures could drop by 4 degrees Celsius from Wednesday to 6 degrees on Thursday in the south of the country, falling to zero overnight.

Gas for immediate delivery fell by 0.40 pence to 53.25 pence per therm due to an oversupplied system.

Total gas demand for Wednesday was expected at 294 mcm and flows at 316 mcm, leaving the system oversupplied by 22 mcm, National Grid data showed.

In the Netherlands, the day-ahead gas price at the TTF hub was 0.05 euro lower at 20.05 euros/MWh.

In the European carbon market, the benchmark Dec. 17 contract was 0.02 euro higher at 5.56 euros a tonne. (Reporting by Nerijus Adomaitis in Oslo; editing by Nina Chestney)

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