LONDON (Reuters) - British prompt gas prices rose on Monday as summer maintenance outages reduced output from North Sea fields, leaving the UK gas market undersupplied.
The within-day gas contract added 0.50 pence to 65.75 pence per therm, while day-ahead gas traded at 65.35 pence, up 0.65 on Friday’s closing level.
Britain’s gas market was around 5 million cubic metres per day (mcm/d) short of supply on Monday morning, National Grid data showed, after maintenance work cut flows through the Bacton Seal, St. Fergus and Teesside terminals.
“There also seems to be a trip in Norway,” one UK gas trader at a utility said, referring to an unplanned production cut announced by Norway’s Statoil.
Output was set to be reduced by 8.6 mcm/d until midday on Monday, Statoil said in a market message.
Britain’s storage levels remained well below the same time last year, but sites were gaining stock steadily.
Britain’s largest storage site at Rough was 69 percent full on Sunday, compared with 95 percent the same time last year, Thomson Reuters Commodities data showed.
Three liquefied natural gas (LNG) deliveries are scheduled to arrive in Britain over the coming week, with a rare cargo from Algeria expected at the Isle of Grain terminal on Tuesday.
Front-month September rose in line with the bullish prompt, adding 0.50 pence on its previous close to 65.30 pence.
A fall in crude prices on Monday morning led to losses on the benchmark front-season gas contract.
The winter 2013 contract traded down 0.90 pence to 71.60 pence, after Brent crude slipped back below the $109 per barrel level.
In Britain’s over-the-counter power market prices rose mildly on the back of the strong gas market but gains were limited by a healthy power supply picture.
All of Britain’s nuclear power units were generating power again on Monday following the restart of the 620-megawatt (MW) Hartlepool 1 unit.
Day-ahead baseload power rose 30 pence to 48.45 pounds per megwatt-hour.
Analysts at Marex Spectron expected that temperatures around seasonal averages could lift demand for cooling in Britain, which is fuelled by electricity.
“Showery conditions are expected to continue this week, but temperatures around the seasonal average could support the air-cooling load,” they said in a report.
Reporting by Karolin Schaps; editing by Keiron Henderson