UK gas prices rebound after touching 2012 lows

Wed Jan 18, 2012 12:30pm GMT

* Lower LNG send-out, storage withdrawals tightens supply

* British storage sites hold 81 pct more gas vs prior year

* Met Office sees average temperatures in Jan, warns of cold risk

London, Jan. 18 (Reuters) - British prompt gas prices rebounded slightly on Wednesday due to a relief rally after prices slumped to a three-week low on Tuesday and supply fell short of demand.

Within-day gas prices rose 0.60 pence at 52.60 pence per therm after touching a 2012 low of 51.80 pence on Tuesday afternoon, with day-ahead gas trading at the same level.

A drop in terminal send-out and a slower pace of storage withdrawals made the system slightly undersupplied, data from National Grid showed.

The network manager forecast gas demand at 335 million cubic meters/day, which is pegged about 4 percent below the seasonal average as mild temperatures prompt households to turn down thermostats.

Gas-fired heating is the main driver of UK winter demand.

"LNG throughput is low but that's not surprising given the shape of the forward curve and low prices," a trader from a major UK utility said.   Continued...

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