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UPDATE 1-UK gas prices hit 19-week high on short supply
September 13, 2012 / 3:56 PM / 5 years ago

UPDATE 1-UK gas prices hit 19-week high on short supply

* Day-ahead gas hits 60.90 p/th

* System seen 18.1 mcm short

* Winter prices find support at 66 p/th (Updates prices and supply, demand forecasts)

LONDON, Sept 13 (Reuters) - British prompt gas prices hit a 19-week high on Thursday on the back of a dip in supplies to the system and rising demand.

Gas for Friday delivery touched 60.90 pence per therm, its highest level since May 4 and up 0.85 pence day on day.

Prices had eased to 60.50 pence by 1500 GMT but remained 0.50 pence up on Wednesday’s settlement.

Britain’s gas market supply was expected to be 138.7 million cubic meters (mcm), National Grid data showed at 1400 GMT, down 2 mcm from forecasts made in the morning.

This left the market 18.1 mcm short even though demand was running around 37 percent below average at 156.8 mcm. “Demand has actually picked up,” one gas trader said.

Flows through the Langeled pipeline that connects Norway with Britain hit 30 mcm this morning but almost halved to about 16 mcm in the afternoon while supplies of liquefied natural gas (LNG) at the Isle of Grain dropped to levels near 10 mcm in the afternoon from over 20 mcm earlier in the day.

Gas prices for winter 2012 delivery edged 0.45 pence higher to 66.20 pence, in line with front-month Brent crude prices which gained 80 cents at $116.75 per barrel.

Winter 2012 gas prices briefly fell below 66 pence per therm in the morning but gained ground in the afternoon to trade slightly above its 100 exponential daily moving average (DMA) rate of 66.13 pence a therm.

Front-month Brent crude hit a four-month high on Thursday on rising expectations that the U.S. Federal Reserve would announce monetary easing to boost the economy.

In Britain’s power market day-ahead prices fell almost 2 pounds from Wednesday’s session to 41.88 pounds per megawatt hour.

UK wind power production levels are expected to hit a peak at almost 5 gigawatts on Friday evening, helping to offset reduced supply from the country’s nuclear plants.

Some 2,280 megawatts (MW) of nuclear capacity was offline at four plants on Thursday, with EDF’s 550 MW Dungeness B22 expected to resume output on Friday after an unplanned outage. (By Susanna Twidale and Henning Gloystein; editing by James Jukwey)

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