Tuesday, 9 November 2010

UK gas prices fall on low export demand, storage

British business gas
prices fell on Tuesday due to low export demand and ample liquefied natural
gas (LNG) and storage, which helped bring prices down despite higher heating
demand from cold weather.

Gas for December eased 0.20 pence at 45.70 pence per therm ($7.37 per mmbtu)
at 1015 GMT while gas for delivery on Wednesday slipped 0.40 pence at 45.90
pence compared with day-ahead prices in the previous session.

Traders said the spread between prompt and front-month prices meant the
market expected storage to withdrawal to satisfy demand, as well as LNG
terminals having the option to turn up to add to supply.

"It's moved lower again from yesterday. We have high demand again today, but
again weak European prices. We're quite easily able to cope. The prompt can
only rally so much before storage will turn on," one energy
broker said.


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