February 1, 2017 / 10:34 AM / 2 years ago

UK GAS-Russian supply cuts and cold forecasts lift prices

Feb 1 (Reuters) - British wholesale gas prices rallied on Wednesday due to colder weather forecasts for next week, an ongoing outage at a big gas storage facility and a reduction in Russian deliveries.

The day-ahead contract rose by 2.1 pence to 57.75 pence per therm by 1022 GMT as expectations of tightening supplies fed into trading.

Gas for immediate delivery was up 1.9 pence at 58 p/therm.

Temperatures from Feb. 8 are expected to drop sharply lower, according to weather forecast data compiled by Thomson Reuters analysts.

Also prompting buying was a 30 percent cut in Russian gas deliveries via the Opal pipeline into Germany as Poland’s successful appeal aimed at restricting Gazprom’s use of the pipeline took effect, the pipeline operator said.

Flows via Opal dropped by around 27 million cubic metres/day to 64 mcm/day on Wednesday, data showed. The reduction tightens supplies available to European markets and could potentially have an impact on British imports from the Continent.

At the Dutch TTF gas trading hub, day-ahead prices rose by 0.80 euro to 22.00 euros per megawatt hour.

In Britain, an extended outage at the country’s largest gas storage site Rough until March 1 is reducing withdrawals.

Total E&P UK’s Elgin-Franklin fields also remain in partial shutdown following difficulties in drilling a well, with no restart date yet offered by the operator.

British near-curve gas prices also rose, with the March contract up by 2.00 pence to 57.25 p/therm.

In the European carbon market, the benchmark Dec-17 contract edged up by 0.06 euro to 5.42 euros a tonne. (Reporting by Oleg Vukmanovic in Milan,; editing by Nina Chestney)

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