LONDON, Feb 19 (Reuters) - British gas prices rose slightly
on Tuesday morning as colder weather was expected to raise
heating demand for the rest of the week and imports of liquefied
natural gas (LNG) were dwindling.
Gas for delivery the next day traded at 67.50
pence per therm at 0920 GMT, up 0.25 pence since Monday morning,
and prices for within-day delivery were also up 0.25 pence to
66.85 pence a therm.
British spot power prices were also down, with contracts for
baseload (24 hours) delivery on Wednesday trading down 0.3
pounds per megawatt-hour (MWh) to 50.70 pounds a MWh.
Analysts said that the price rise was a result of colder
weather moving into Britain by Wednesday.
'It's getting cold again, and that that will lift heating
demand and prices,' one gas trader said.
Britain's Met Office said that it expected maximum
temperatures to drop from 10 degrees Celsius on Tuesday to 5
degrees on Wednesday and 3 degrees on Thursday.
'Brisk easterly winds will make it feel very cold,' the Met
Traders also said that falling import volumes of LNG to
Britain were having a bullish effect on prices.
'Asian LNG prices are now so high that we cannot compete in
Europe anymore so the Qataris are sending all their ships East,'
another gas trader said.
Asian spot LNG prices have risen towards $20 per million
British thermal units (mmBtu), a four year high and up from
around $13 per mmBtu in Q4 of last year.
Despite the bullish sentiment, National Grid data showed
that Britain's gas demand was well covered by supplies.
Gas demand was expected to be 316.1 million cubic metres
(mcm) on Tuesday, 2.5 percent above the seasonal norm, but with
flows seen at 335.9 mcm the system would be oversupplied by
almost 20 mcm.
Further out on the curve, prices for gas deliveries next
summer also remained high despite dipping below 64 pence a
Trading around 63.85 pence, the contract remained well above
all its 50, 100 and 200 exponential daily moving average values
of 62.89, 62.29 and 61.77 pence a therm respectively, and French
bank Societe Generale said in a research note that it
recommended selling summer gas prices.
'We remain more bearish for the future curve (and) recommend
selling NBP Summer 13 as we believe the forward curve has not
taken into account the gas already 'pre-paid' by European
companies to Gazprom in 2009-2012,' the bank said.
'No growth in European gas demand this year and increased
take-or-pay volumes are likely to weigh on NBP gas prices,
especially over the summer,' it added.
(Reporting by Henning Gloystein. Editing by Jeremy Gaunt.)
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UK natural gas prices
National Grid instant flows
National Grid gas demand
North Sea gas and power maintenance
UK: baseload prices, peakload prices,
FRANCE: baseload prices, peakload prices, outages, report
GERMANY: baseload prices, peakload prices, outages, report
CENTRAL EUROPE: report
SWITZERLAND: outages, reservoir levels
EU CARBON PRICES SPEEDGUIDE:
Keywords: MARKETS BRITAIN GAS/POWER
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