Bloomberg News

U.K. Winter Gas Rises as Brent Crude Climbs to Highest in Month

June 09, 2011

June 9 (Bloomberg) -- U.K. winter natural gas advanced after Brent crude rose to its highest in more than a month.

Gas for the six months from October climbed as much as 0.45 pence, or 0.6 percent, to 72.2 pence a therm as of 4:46 p.m. in London, according to broker prices compiled by Bloomberg. That’s equal to $11.83 a million British thermal units.

Brent for July settlement gained as much as 1.5 percent to $119.59 a barrel on London’s ICE Futures Europe exchange, its highest since May 5. Oil costs can boost the price of some mainland European gas contracts, affecting the U.K. market because of pipeline links to the continent.

U.K. winter baseload power advanced 20 pence to 59.15 pounds a megawatt-hour, broker data show. Baseload is delivered around the clock.

Gas for next month was unchanged at 58.4 pence amid ample pipeline and liquefied gas flows and lower-than-usual demand for the time of year.

National Grid Plc forecast gas demand in the 24 hours through 6 a.m. tomorrow at 214 million cubic meters, 35 million less than normal for the season, according to the pipeline manager’s website. The nation’s pipelines will hold 337 million cubic meters of the fuel at that time, 1 million less than at the start of today.

Within-day gas slipped 0.3 pence to 59.1 pence a therm. Gas for tomorrow was at 59.2 pence.

Normal Temperatures

“Temperatures are likely to remain close to average in most areas” from June 23 through July 7, the U.K.’s Met Office said on its website. “Some southern and eastern parts of the U.K. may continue to see above average temperatures at times.”

The South Hook LNG terminal will receive an additional cargo of the fuel next week, according to Milford Haven Port Authority. The Rasheeda is due to dock on June 16, the port said on its website. It can carry 260,912 cubic meters of LNG, according to AISLive data on Bloomberg.

Deliveries from the Isle of Grain LNG facility east of London rose, grid data show. North Sea flows also increased into the Bacton Seal terminal and imports from the Netherlands climbed to an average rate of 17 million cubic meters a day after halting earlier today, according to the data.

U.K. baseload power for the next working day climbed 45 pence to 51.65 pounds ($84.99) a megawatt-hour, according to broker data compiled by Bloomberg.

--Editors: Rob Verdonck, Mike Anderson

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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