Bloomberg News

U.K. Natural Gas Stable as Demand Remains Below Normal Levels

June 07, 2011

June 7 (Bloomberg) -- U.K. natural gas for next month was little changed as demand for the fuel remained below normal for this time of year and supplies were ample.

National Grid Plc forecast gas demand in the 24 hours through 6 a.m. tomorrow at 216 million cubic meters, 33 million less than normal seasonal demand.

Gas for July rose 0.15 pence, or 0.3 percent, to 58.4 pence a therm as of 4:30 p.m. in London, according to broker prices compiled by Bloomberg. That’s equal to $9.59 a million British thermal units. Same-day gas fell 0.25 pence at 58.8 pence a therm.

“We do not expect much change in prices over the coming week,” Societe Generale SA analysts including Emmanuel Fages said in an e-mailed report dated yesterday. There are “quite bearish” factors weighing on U.K. gas, the bank said, citing below-normal demand, gas storage levels above last year’s level for many European countries and continuing arrivals of liquefied gas tankers.

Exports to mainland Europe were forecast to increase today. Interconnector (U.K.) Ltd.’s pipeline was exporting at a rate of about 31 million cubic meters a day to Belgium, from 23 million yesterday, according to data on the company’s website.

U.K. baseload power for the next working day fell 20 pence, or 0.4 percent, to 51 pounds a megawatt-hour, according to broker data compiled by Bloomberg. Baseload is delivered around the clock.

Brent oil for July gained as much as $1.45 to $116.14 a barrel on the ICE Future Europe Exchange in London. Oil costs can affect forward U.K. prices.

Winter gas, to be delivered in the six months from October, advanced 0.25 pence to 71.7 pence a therm. Electricity for winter rose 35 pence to 59 pounds a megawatt-hour.

--Editor: Rob Verdonck

To contact the reporter on this story: Ben Farey in London at bfarey@bloomberg.net

To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net


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