LONDON: British gas prices rose slightly on Wednesday on weaker imports from Norway and Belgium and as demand was pegged just above seasonal norms, while curve contracts tracked a buoyant crude market on hopes for US budget crisis talks.
Gas for within-day delivery rose 0.50 pence to 66.50 pence per therm at 0853 GMT, with imports from Norway's two pipelines dropping by around 10 million cubic metres per day (mcm/d) and flows from Belgium halted at the start of the gas day, National Grid data showed.
"Looks like Norway and IUK (Belgium's gas pipeline) decided to take gas out of the UK," a gas trader at a utility said.
The drop in flows from neighbouring markets left the gas system undersupplied by around 17 mcm/d, while gas demand was set slightly above seasonal norms at 300 mcm/d.
Traders said there was little potential for the British prompt market to trade lower, given that price levels were near those usually seen at the end of the winter period in March.
"The downside is not massive either. It's a perfect range-trading situation," another gas trader said.
Front-month gas gained 0.35 pence to 67.30 pence, while February changed hands for 67.70 pence, also 0.35 pence higher day on day.
Rebounding crude prices supported benchmark seasonal gas contracts, with summer 2013 adding 0.15 pence at 62.40 pence.
Brent futures edged up above $109 per barrel on hopes for a resolution to the budget crisis in the world's top oil consumer, the United States.
Power prices in Britain fell on Wednesday, shrugging off gains in the gas market as the generation surplus was strong thanks to a high influx of wind power.
Baseload day-ahead power fell 25 pence to 48.55 pounds per megawatt-hour (MWh).
National Grid data showed power production was well above demand levels as wind farms were generating more than 3 gigawatts of electricity on Wednesday morning and forecasts showed a rise to around 4.5 GW later in the day.
Center>Copyright Reuters, 2012
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