Thursday, 22 March 2012

UK spot gas hits 15-day low on weather,storage news

British spot gas prices sank on Thursday as rising temperatures pushed demand 12 percent below the seasonal average and on reduced injection capacity into Rough storage, while weaker crude oil prices led to a drop in forward gas contracts.

Gas for immediate delivery swung to a 15-day low at 58.60 pence per therm as upward revised temperature forecasts led to expectations of lower demand during the warm spell.

Day-ahead gas fell 0.95 pence to 58.90 pence.

UK temperatures are forecast to maintain highs of up to 18 and 19 degrees Celsius until Sunday.

Centrica's plan to halve gas injection capacity at Britain's largest storage site, Rough, from March 26-31 added to downward momentum.
Since February, traders have been injecting gas into storage in order to balance an oversupplied gas network. Injection limits raise the prospect of continued oversupply at a time when mild weather is expected to weigh on demand.

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