UK gas prices remain weak

Click to follow

British gas prices remain weak today, helped by mild weather which trimmed heating fuel demand and Russian supply reaching Europe via Ukraine for the first time in two weeks.

Gas for tomorrow is down 2.10 pence at 53 pence per therm, while February shed 0.75 pence to 52.50 pence and the 2009 second quarter inched down 0.45 pence to 43.30 pence.

"Russian gas hit in, which should displace some demand," said a trader. "There's plenty of gas around, with lots of Norwegian selling. More LNG is due to hit UK in February. Weather is looking a bit milder."

Russian gas started to reach some countries in Europe yesterday, though pipeline operators said it could be later today before supplies arrive other parts of Europe.

With the crisis over, the market refocused on the slowdown in the global economy, which is eating into demand for energy, while the temperature climbed following a two-week cold spell at the turn of the year.

Asked about future, the gas trader said: "February may struggle to go much lower than this...But the summer could go to 30 pence easily. The world economy is not in the best of shape. There's lots of gas floating at the moment."

The National Grid website showed the system was long by late morning, with Norway pumping the fuel at a speed of around 70 million cubic metres per day via Langeled and Rough storage facilities adding more than 40 million.

In the power market, electricity prices were also weak, despite 13 power generating units being offline, including seven nuclear units.

Baseload electricity for Thursday stood at around 51 pounds per megawatt hour, down from around 52 pounds late on Monday. March fell 0.90 pound to 50.10 pound and the 2009 summer was little changed at about 43 pounds.