LONDON: British wholesale natural gas prices for immediate delivery rose on Thursday morning as high demand left the system undersupplied, but prices for delivery on Friday dropped as rising temperatures were expected to reduce gas use.
Gas prices for delivery within the day were trading at 53 pence per therm at 0735 GMT, up 0.3 pence since their last close.
The price rise as a result of an undersupplied system. Britain's gas demand was expected to be 225 million cubic metres (mcm) on Thursday, 7 percent above the seasonal norm, according to data from National Grid, and with flows only seen at 201 mcm, the system would be left 24 mcm short.
But the strain on the grid was expected to ease towards the weekend, as rising temperatures are expected to reduce heating demand, pulling doen gas prices for Friday delivery half a pence to 52 pence a therm.
"Today's sytem looks fairly tight, so prices are up a bit, while tomorrow's market looks more relaxed, pulling contracts for Friday down," one gas trader said.
Meteorologists said that Britain's average temperatures were expected to rise from 12.25 degrees Celsius in Thursday to over 13 degrees on Friday, over 4 degrees above the seasonal norm.
As a result, heating gas demand was expected to drop from around 125 mcm on Thursday to below 120 mcm on Friday.
In Britain's wholesale power market, prices for baseload (24 hours) delivery on Friday dropped 1.1 pounds ($1.76) per megawatt-hour to 44.55 pounds on the expected return of EDF Energy's 550 megawatt Dungeness B-21 nuclear unit to the grid, after completing planned maintenance work.
Available wind power capacity was expected to remain relatively stable between 3,000 and 4,000 MW on Thursday and Friday.
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