Monday, 13 June 2011

UK GAS: Prompt gains slightly on short system, curve moves up

UK gas prices rose slightly on the prompt Monday, with the network looking short of gas, although with no great concern in the market.

Overall the prompt remains stuck in its range of recent weeks, just under 60 pence/therm.

On the forward curve the seasons were also showing gains Monday from last week's closing levels.

At around midday UK time Monday the UK within-day was at 59.55 pence/therm and the day-ahead at 59.50 p/th, compared with a day-ahead closing level last Friday slightly lower at 59.10 p/th.

National Grid, the UK gas system operator, showed supply for the day forecast at 194 million cubic meters, making the network 16 million cu m short against expected demand of 210 million cu m.

Recent cooler, gloomier weather in the UK had helped push heating demand up a bit, said one trader, but the weather would be moving more back to normal by Tuesday/Wednesday, possibly taking away that extra heating load.

Across all parts of the demand mix, the total demand is in any case relatively low, below National Grid's estimate for the seasonal norm, which would be 248 million cu m. Total demand includes not just heating, but industry, power stations

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