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Prompt prices rise on increased demand from utilities

Published 10/11/2014, 10:12
Updated 10/11/2014, 10:20
Prompt prices rise on increased demand from utilities
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LONDON (Reuters) - Prompt natural gas prices in Britain rose on Monday morning as outages at nuclear plants boosted demand from gas-fired power generators.

Prices for within-day delivery were trading at 54.15 pence per therm at 09:45 GMT, up 0.9 pence since their last settlement. Prices for delivery on Tuesday were up 0.85 pence at 54 pence per therm.

With supply flows at about 215 million cubic metres (mcm) per day on Monday and demand expected to be about 238.2 mcm, the system was 23.2 mcm undersupplied, National Grid data showed.

Demand from British gas-fired power stations is high because of outages at several nuclear plants.

Eight reactors with a generating capacity of a little more than 4.7 gigawatts are offline after an unplanned outage left EDF Energy's Dungeness B-21 nuclear reactor out of action on Monday morning.

Nuclear usually provides about a fifth of Britain's electricity supply, but gas plants were providing around 40 percent of the country's power on Monday, National Grid data showed.

Meanwhile, gas supplies from Norway were reduced by an extension to unplanned maintenance at the Skarv field, off the Norwegian coast.

Norwegian gas system operator Gassco said on Sunday that the field will start production on Monday, but flows will remain reduced longer than previously expected.

Although Gassco did not provide an end date, Reuters calculations show that the outage, which started on Nov. 2, is now expected to end on Nov. 19.

"The volume impact of the maintenance is 10.9 mcm/day, which indicates that roughly (the) entire production from the field is closed," analysts at Thomson Reuters Point Carbon said in a daily market report on Monday.

Further along the curve, the December gas contract was flat at 55.10 pence per therm.

In Britain's power market, the nuclear outages helped to push up prices. Power for day-ahead baseload delivery traded at 45.25 pounds per megawatt hour, up 3.25 pounds.

In Europe's carbon market the benchmark EU Allowance (EUA) was steady, trading 0.02 euros higher at 6.78 euros a tonne on ICE Futures Europe.

(Reporting by Susanna Twidale; Editing by David Goodman)

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