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| UK NBP gas prices move higher on cold fears |
http://www.sand-mill.com
2008-2-18 Platts [ views:
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| UK gas prices at the National Balancing Point were a touch higher again Friday as forecasts for the following week turned colder and the system relied on storage for length, traders said. Within-day was up half a penny to 51 p/therm by midday GMT, and day-ahead was up 1.25 p to 51.75 p/th.
National Grid data showed demand up at 380 million cubic meters/day at 11:00 GMT, 35 million cu m/d above seasonal norms, in line with colder temperatures in the UK. The system was 13.3 million cu m long at that time, but both long- and medium-range storage were withdrawing at a fairly high rate, and that was interpreted bullishly by the market, traders said.
Overnight, short-range storage was also seen flowing at an uncharacteristically high rate, with both Partington and Glenmavis flowing at or above 8 million cu m/d for a few hours. Short-range storage uses LNG to send flows very quickly for short periods into the system, but is generally only used for slight local balances, and at high rates would empty out in only a few days.
One trader said the system had been fairly short late Thursday, with calls made on first medium-range storage and then short-range. That saw an overnight price of over 52 p/th, a penny and a half above the session's within-day close.
Other supplies were largely stable Friday, although no gas was being imported through the UK-Belgium Interconnector. The pipeline was even scheduled to reverse flow to UK export mode Friday at 14:00, somewhat surprising given the bullish UK market.
The near curve had attempted a rally early on, traders said, led by fears over cold weather in the UK. Forecasts indicated continuing cold into the following week, with temperatures below previous estimates. That led March to climb as high as 50.9 p/th during the morning, but system length pulled it back down to 50.1 p/th by noon, flat on the previous close. April was also flat on Thursday at that time, at 49.775 p/th. "There's plenty of gas around at the moment," said one trader.
On the far curve, the week's bull run seemed to have lost steam as both crude oil and coal prices eased back from their highs. Summer 08 was off a quarter penny to 49.5 p/th by 12:00, but winter 08 gained a little further, to 65.5 p/th from 65.1 p/th Thursday.
"It's all on sentiment," said one trader. "No one in the market is short at the moment, and there's some end-of-week profit-taking."
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