LONDON: Prompt natural gas prices in Britain rose on Tuesday morning as North Sea maintenance work left the system undersupplied although power prices dropped on the back of a warm weather outlook for the rest of the month.
Natural gas prices for within-day delivery were trading at 49.80 pence per therm at 0845 GMT on Tuesday, up 0.55 pence since their last close, while prices for next-day delivery were up 0.30 pence to 49.50 pence per therm.
"Tight intra-day supplies are offering some support to day-ahead (gas prices)," one gas trader said.
National Grid data showed that Britain's gas demand was expected to be around the seasonal norm of 175.5 million cubic metres (mcm), but that expected flows would be almost 15 mcm below that at 162.6 mcm.
"Despite today's undersupplied market, I'd expect the situation to ease as North Sea maintenance work at the Southern Area (gas field) facilities are ending today," another gas trader said.
Because of the improved supply outlook, gas prices for delivery next winter, which the gas markets defines with the start of October, were down 0.15 pence to 58.85 pence per therm.
In Britain's wholesale power market, prices for baseload (24 hour) delivery on Wednesday were down 2.05 pounds per megawatt-hour (MWh) to 42.25 pounds per MWh.
Traders said that the lower prices were largely a result of a mild weather outlook for the rest of the month, as well as wind power capacity which is expected to rise from around 1,000 MW on Tuesday to around 3,000 MW later this week.
Meteorologists said that Britain's average temperatures would rise from around the seasonal norm of 13 degrees Celsius on Tuesday to 15 degrees or more for much of the rest of September.
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