December 29, 2010 / 10:58 AM / 9 years ago

UK winter gas gains on extended cold, low storage

 LONDON, Dec 29 (Reuters) - British prompt gas prices were in
line with levels seen before the Christmas holiday as demand
remained low, while winter contracts climbed due to extended
cold weather and declining storage levels, traders said.
 Day-ahead gas traded at 60.75 pence per therm at 1035 GMT,
in line with trading levels seen on Friday, while gas for
delivery on Wednesday traded at 60.00 pence due to weak
 National Grid data for Wednesday showed demand was more than
20 million cubic metres (mcm) below seasonal norms at 325.1 mcm.
 Even though the system was short, low demand kept prices
from rising and long-range storage withdrawals helped compensate
lower output from the Dragon and Isle of Grain liquefied natural
gas (LNG) terminals.
 Rough storage flows added around 35 mcm on Wednesday
morning, while supply from Dragon fell to zero at the start of
the gas day and the Isle of Grain terminal supplied only around
3 mcm, according to National grid data.
 January gas traded at a three-week high of 60.05 pounds
($9.25 per mmBtu) at 1000 GMT, while the first-quarter contract
rose to 59.00 pence.
 "I think weather is main driver of balance of winter. We
have colder forecasts in the short term and storage stocks
continue to be depleted," one gas trader said.
 Latest Weather Services International (WSI) forecasts showed
Britain expected colder-than-normal weather conditions in
January, which is set to drive gas demand levels for domestic
 At the same time, long-range storage levels continued
falling, leaving end-of-year levels around 43 percent lower than
in 2009, National Grid data showed.
 In the over-the-counter (OTC) power market, prices defied
the impact of two unplanned nuclear reactor outages as demand
was also low for electricity.
 Power for delivery on Thursday fell to 49.25 pounds per
megawatt-hour (MWh) at 1030 GMT.
 Britain's largest nuclear power operator EDF Energy said on
Wednesday it had stopped its 640-MW Torness 1 and 480-MW Hinkley
Point B-8 nuclear reactors for unplanned outages. [ID:nWLA1896]
 "The demand will be really low, so less impact (from plant
outages) until the New Year," one British power trader said.
 Latest data from the grid operator also showed that the
Heysham 1-2 nuclear reactor would reconnect to the grid on
Thursday, adding further supply to the system. [POWER/GB]
 (Reporting by Karolin Schaps; Editing by Alison Birrane)

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