(Reuters) - British prompt wholesale natural gas prices edged higher on Thursday as colder temperatures pushed heating demand higher, while the system remained oversupplied.
Gas for next-day delivery rose 0.15 pence at 29.05 pence per therm by 1039 GMT from the previous settlement, while gas for immediate delivery was 0.10 pence higher at 29.20 p/therm.
Britain’s gas system was oversupplied by 9.2 million cubic metres (mcm), with demand forecast at 324.7 mcm - above Wednesday’s level of 314 mcm, National Grid data showed.
Flows from the UK Continental Shelf have increased after planned maintenance in the North Sea was completed. But the send-out of liquefied natural gas has fallen slightly.
“It’s a bit colder and there’s a bit more demand, but overall not much changed, the prompt could simply by tracking the front-month contract,” in the absence of other fundamental drivers, a UK-based gas trader said.
The month-ahead March gas contract traded 0.15 pence per therm higher at 28.65 p/therm.
Temperatures are forecast to decline by a couple of degrees Celsius by the weekend, according to Britain’s Met Office.
But milder temperatures are set to return from Feb. 20, according to Thomson Reuters meteorologist Georg Muller.
The benchmark summer 2016 gas contract fell 0.05 p/therm at 27.05 p/therm.
In the Netherlands, the day-ahead gas price at the TTF hub dipped by 0.20 euro per megawatt-hour to 11.98 euros/MWh.
In the European carbon market, front-year EU allowances declined by 0.19 euro to 4.70 euros a tonne.
Reporting by Oleg Vukmanovic; Editing by Tom Heneghan