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Prices rise as cold weather boosts consumption

Published 16/02/2016, 08:33
© Reuters.  Prices rise as cold weather boosts consumption

(Reuters) - British wholesale gas prices rose on Tuesday morning as gas consumption increased due to colder-than-average temperatures.

Gas for immediate delivery was 0.45 pence higher at 30.60 p/therm at 0820 GMT compared to the previous settlement.

Britain's gas system was undersupplied by around 8 million cubic metres (mcm) on Tuesday. Demand is forecast at around 320 mcm/day - 38 mcm above seasonal normal demand - while flows are at around 312 mcm/day.

"Cold conditions have pushed up heating demand," a UK gas trader said.

Temperatures are forecast to be colder than normal this week, increasing demand for heating. By the weekend, temperatures are expected to return to slightly above average levels.

On the supply side, Total's St Fergus terminal is experiencing a reduction in flows. The company said it does not know when offshore production will restart.

National grid data shows Total's St Fergus terminal is flowing at 17 mcm/d at the time of writing.

Further along the UK gas curve, the Summer 2016 contract was 0.70 p higher at 27.70 p/therm.

In the Netherlands, the March gas price at the TTF hub was 0.28 euros higher at 12.10 euros per megawatt-hour, also due to increased consumption.

In the European carbon market, front-year EU allowances were up by 0.10 euros at 4.91 euros a tonne.

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