UK gas rises as weather due to turn cooler

Mon Jan 9, 2012 10:49am GMT
 

* Colder weather expected from Friday - Met Office

* Rest of winter to turn colder, less windy - Point Carbon

* Lower wind, exports drive up spot power prices

LONDON, Jan 9 (Reuters) - UK prompt gas prices rose on Monday morning as cooler weather forecasts towards the end of the week increased the demand outlook and after a drop in gas flows from one liquefied natural gas (LNG) terminal left the system tightly supplied.

The within-day gas contract gained 1.05 pence on Monday, rising to 53.90 pence per therm, after supply from the South Hook LNG terminal fell to the lowest since the beginning of the year, tightening supply margins.

Weather forecasts for Friday onwards show colder weather, with temperatures potentially dropping below seasonal norms at the start of next week, Britain's Met Office said.

Gas for the balance of this week rose above spot price levels at 54.00 pence per therm, up 1.75 pence from the previous session.

"Flows from South Hook are oddly lower than last week, also weather forecasts are coming in cooler for next week," one UK gas market analyst said.

Front-season gas rose for the first time in three sessions, rebounding from a 13-month low reached on Friday to 53 pence, up 0.90 pence from its pre-weekend closing price, driven by rising Brent prices.   Continued...

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