- March 16th, 2012
UK gas rises as maintenance squeezes supply
British prompt gas prices rose on Friday morning as planned maintenance at a terminal in Scotland reduced output from the facility, leaving the system undersupplied despite low demand and mild weather.
British within-day gas prices rose nearly half a penny to 60.25 pence per therm at 1036 GMT, while Monday gas also traded higher at 60.50 pence.
“There is continued St Fergus maintenance which is reducing supplies from there and keeping system a bit short, despite pretty mild temperatures,” a gas market analyst at a bank said.
Supply from Total’s St Fergus terminal in Scotland nearly halved early on Friday to around 9 million cubic metres per day (mcm/d) as maintenance work was expected to restrict output for 12-18 hours.
The gas market was around 9 mcm/d undersupplied, driving prices higher despite little pressure from demand which slipped nine percent below seasonal norms, National Grid data showed.
Weather conditions are forecast to cool down at the weekend but pick up again towards the end of next week, Britain’s Met Office said.
April gas traded in line with spot prices at 60.00 pence. The outlook for liquefied natural gas (LNG) supply also improved with another scheduled cargo arrival at the Isle of Grain on March 21.
Curve gas contracts traded sideways in thin volumes after a a steep drop in Brent crude prices steered contracts lower on Thursday.
Winter 2012 gas traded at 73.50 pence per therm, in line with closing prices in Thursday.
British prompt power prices also rose, responding to tighter supply margins as one nuclear reactor stopped for maintenance on Friday.
Monday baseload power traded up 45 pence at 46.85 pounds per megawatt-hour (MWh).
