May 24, 2011 / 12:53 PM / 6 years ago

UK gas prices rise on oil, tight supply

LONDON, May 24 (Reuters) - British gas prices rose on Tuesday as a drop in liquefied natural gas terminal flows pressured short-term supply and rising oil pressured the curve.

Gas for delivery on Tuesday or Wednesday rose to 58.50 pence per therm, up about half a penny on the previous close, after inputs from Europe’s biggest import terminal, South Hook, tumbled overnight, adding to supply constraints from maintenance on North Sea infrastructure.

Thanks to low demand the system remained adequately supplied, limiting prompt increases, while the curve was pushed up by oil rising about $1.7 per barrel after market-swaying Goldman Sachs raised its forecasts for North Sea Brent crude. [O/R] Winter 2011/12 gas rose 0.30 pence to 69.40 pence per therm, while Summer 2012 contracts firmed by 0.40 pence to 63.40 pence, according to one broker, on expectations that oil-indexed continental European gas supplies will be more costly in a few months time.

Reporting by Daniel Fineren

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