High storage inventories pull UK gas prices down

LONDON, June 30 (Reuters) - A reduction in Britain's gas storage injection capacity further lowered demand and pushed prompt prices down early in Wednesday's trading session, traders said.

"Prices dropped off about half a penny," one dealer said.

Gas for Wednesday opened at 24.75 pence per therm and fell to a low of 24.25 before paring losses to trade at 24.35 pence per therm. Gas for Thursday delivery opened at 24.50 and fell to around 24.25 early on Wednesday's session, touching on year lows.

Centrica (CNA.L) said only one of the Rough storage facility's compressors was operational due to high inventory levels and fog. [ID:nL1665274]

Traders said gas supply cuts from Norway to England through the Langeled pipeline had not affected prices.

"The cuts haven't helped, the system is still long," a gas trader said.

Gas flows through Langeled halved from 10 million cubic metres to around 5 million early on Wednesday's session. The cuts were marginally offset as supply to Britain via St. Fergus and Bacton increased slighlty.

In the power market, prices remained firm following price rises on late trading Tuesday.

Prices increased on expection of additional demand from more air conditioning use from hotter-than-expected weather.

Baseload electricity prices for Thursday were around 39.5 pounds per megawatt hour in early trade on Wednesday, one trader said.

August prices were down to 32.4, from 32.5 pounds on late trade on Tuesday.

(Reporting by Kwok W. Wan)