LONDON (Reuters) - British wholesale gas prices rose on Wednesday as colder weather boosted demand for heating and the system became undersupplied.
Gas for immediate delivery TRGBNBPWKD was up 2.75 pence at 50.30 pence per therm at 1254 GMT, while day-ahead gas TRGBNBPD1 rose by 1.70 pence to 49.60 p/therm.
Traders said prices were higher due to increased demand and as newly reported outages moved Britain’s gas system from being oversupplied in the morning to undersupplied.
The grid was undersupplied by around 11 million cubic metres (mcm), with demand forecast at 315.4 mcm and flows at 304.3 mcm/day, according to National Grid data.
In the early afternoon, Shell reported an unplanned outage at its St Fergus gas terminal, which has reduced capacity by 10 mcm/day.
Perenco’s Bacton terminal had exports reduced to 4.5 mcm/day and Engie E&P UK reported an unplanned flow reduction at its Cygnus offshore facilities. [GAS/OUT]
Centrica said flows were resuming at the North Morecambe gas sub-terminal during an outage which is scheduled to end at 1500 GMT.
The weather in Britain has also turned colder since the weekend, with temperatures ranging between -3 and 10 degrees Celsius in Britain, according to the Met Office.
Weather forecasts for January point towards slightly colder temperatures and consumption towards the end of the next 15 days will be higher, up to 260 mcm, said Dean Hunt, gas analyst at Thomson Reuters.
“Gas-for-power consumption is higher than previously forecast for the Christmas period, back up to levels between 50 and 65 that we saw before the holidays,” he added.
Contracts further along the curve also rose.
Oil prices rose for a fourth consecutive session on Wednesday to trade above $56 a barrel, not far off their peaks since mid-2015, with the market awaiting evidence of OPEC supply reductions in the new year. [O/R]
In the European Union’s carbon market, the benchmark Dec-17 carbon contract CFI2Zc1 was 0.04 euro lower at 6.30 euros a tonne.
In the Netherlands, the day-ahead gas price at the TTF hub TRNLTTFD1 was 0.25 euro higher at 18.85 euros per megawatt hour.
Reporting by Nina Chestney