April 25, 2012 / 10:56 AM / 6 years ago

UK prompt gas prices rise on undersupplied system

* Prices expected to fall on rising LNG imports

* Weather outlook remains rainy, cool

LONDON, April 25 (Reuters) - British prompt gas prices rose on Wednesday morning as the market was more than 20 million cubic metres (mcm) undersupplied and the immediate weather forecast showed a continuation of cool and rainy weather.

Gas for day-ahead delivery was up 0.65 pence a therm to 59.60 pence at 1010 GMT and within-day gas was trading around 58.70 pence per therm.

The UK gas market was expected to be 22.10 mcm undersupplied on Wednesday, according to data from National Grid, as storage flows into the system dropped.

Despite this price rise, analysts at Point Carbon said they were bearish in their immediate spot gas price outlook, with day-ahead prices expected to be 58-59.40 pence per therm.

LNG send outs provide flexibility and five cargoes (are) seen heading to the UK, suggesting flows could remain high going forward,” Point Carbon said.

The UK’s MetOffice said it expected weather conditions to remain wet and cool, with maximum temperatures to rise to a high of 9 degrees Celsius on Thursday.

Further out on the curve, gas prices for delivery in May were trading at 57.65 pence a therm.

Energy brokerage GFI said it expected May prices to drop.

“Yesterday’s low was 56.60 ... (and) the bigger picture charts suggest it will be breached, and when it is a reaction should occur targeting 55.20 next, then 52.80, then the 51.55 low from January.”

In Britain’s over-the-counter electricity market, prices also eased, with day-ahead baseload (24 hours delivery) prices falling 65 pence per megawatt-hour (MWh) since Tuesday, to 44.60 pounds per MWh. (Reporting by Henning Gloystein; Editing by Alison Birrane)

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