January 6, 2011 / 11:03 AM / 7 years ago

UK gas rises on cold, power down on high supply

 * Rough stocks 44 pc below previous year
 * Norway's Kollsnes gas processing plant near full capacity
 LONDON, Jan 6 (Reuters) - UK gas prices reversed losses on
Thursday as contracts edged higher after three days of losses on
the return of colder weather, traders said.
 Gas for delivery on Friday rose 0.80 pence to 58.00 pence
per therm at 1005 GMT, while the month-ahead price traded at
57.80 pence ($8.97 per mmBtu), up 1.10 pence.
 "People might have gone short yesterday and are now taking
some profit," one gas trader said.
 "Also, winter isn't over yet. I think people might have
realised that we could still get some cold weather and could
struggle with storage running low."
 Stocks at Britain's largest storage site, Rough, were around
44 percent below levels seen at the same time last year on
Thursday. The early onset of wintry weather conditions prompted
gas suppliers to tap reserves over one month earlier this winter
than in 2009.
 For a graphic showing long-range storage levels and NBP
February and March contracts, click here:
 The rapid decline in gas stocks has stirred up concern among
traders that, if the next weeks hold a longer cold spell, they
may not be sufficient to meet demand.
 "There is enough there to get us to the end of February, so
it's not a serious problem but we are at lower levels than we
have been for a long time, if ever," another British gas trader
 Prices also firmed in line with colder weather forecasts.
The UK's Met Office predicted temperatures to rise above normal
in southern England over the coming three to five days, but the
rest of the country is expected to see further outbreaks of
sleet and snow.
 Gas demand was forecast slightly above normal levels on
Thursday. Gas supply was strong, with high imports from Norway,
liquefied natural gas (LNG) terminals and the Netherlands,
National Grid data showed.
 Norway's Kollsnes gas processing plant also returned to near
full capacity, operator Gassco said, reducing risk of lower
Norwegian supply over the rest of the winter. [ID:nOSN004918]
 The Belgian gas interconnector was importing gas to Britain
since the early hours on Thursday.
 Britain's power market defied any impact from the bullish
gas market, as strong supply due to high nuclear availability
and imports from France helped meet demand.
 Power for Friday delivery fell 0.35 pounds to 49.40 pounds
per megawatt-hour (MWh), a loss which was also due to the usual
dip in demand on Fridays on factories winding down ahead of the
 National Grid data showed that only the Hinkley Point B8
reactor was off from its usual working nuclear fleet, although
Dungeness B-21 and Hartlepool 1 are expected to go offline on
Jan. 15  and Jan. 17, respectively. [POWER/GB]
 Britain was importing around 1,000 MW from France on
Thursday morning, network data showed, where high nuclear
availability also helped weak prices. [POWER/FR]
 (Reporting by Karolin Schaps)

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