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Resources analyst Charlie Long sees good times ahead for uranium


Finance & Stock Market News


UK gas prices for next week rise on Bacton work

Fri, 25th May 2012 12:54


By Henning Gloystein

OSLO, May 25 (Reuters) - British prompt gas pri
ces eased slightly on Friday morning as the system was oversupplied, but prices for early next week rose on the back of expected maintenance work at the Bacton Shell gas field.

Warm weather and a long weekend ahead in many parts of continental Europe left Britain's gas demand at 183.3 million cubic metres (mcm), almost 30 percent below the seasonal norm, and meant that the UK market was oversupplied by around 10 mcm, according to data from National Grid.

As a result, gas prices for within-day delivery fell by 0.2 pence per therm since Thursday, to 52.80 pence at 1045 BST (0945 GMT) on Friday.

Although the UK's MetOffice said that the current warm weather was expected to last until next week, gas prices for delivery on Monday rose slightly as maintenance at the Bacton Shell gas field was expected to begin next Monday.

Gas prices for delivery on Monday rose around one penny a therm to 53.40.

'The maintenance at Bacton Shell is expected to start next Monday, lasting for 36 hours with an expected loss of 10.5 mcm/d in capacity. This would reduce UK continental shelf gas production early next week,' analysts at Point Carbon said, adding that they expected gas prices to come out between 53 and 53.50 pence per therm on the back of this maintenance.

North Sea gas supplies to Britain remained interrupted on Friday, with the Langeled pipeline form Norway pumping under 30 mcm per day.

Langeled is Britain's main sub-sea gas import route and has a capacity of 70 mcm/day, but flows have been reduced for much of the week following a technical outage at Norway's Troll A gas platform.

Power prices for basloead (24 hours) delivery the next working day rose 75 pence a megawatt-hour (MWh) to 40.60 pounds per MWh.

Brokers at Marex Spectron said the rise was largely down to the increase in equivalent gas prices.

Further out on the curve, gas prices for delivery in June continued to be bearish, trading at 53 pence a therm.

Energy brokers GFI said that they expected a drop to levels around 51.55 to be 'almost inevitable.'

Winter gas prices, by contrast, rose back from below 65 pence a therm on Thursday to 65.65 pence on Friday after Brent crude prices stabilised.



(Reporting by Henning Gloystein; Editing by Alison Birrane)

(Henning.Gloystein@thomsonreuters.com)(44 207 542 6659)(Reuters Messaging: henning.gloystein.thomsonreuters.com@reuters.net)

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