Prompt prices hit near month highs Wednesday on the UK's NBP gas trading hub with forecasts of colder temperatures the key driver, market sources said.
The within-day contract was valued at 67.60 pence/therm at 1200 GMT, up 3.30 p/th from where it closed Tuesday, and day-ahead gas rose 2.20 p/th to 67.80 p/th.
The values were the highest since December 12.
"Demand has risen this morning with the drop in temperatures," a market analyst said. "Storage withdrawals from Easington Rough are at full capacity of 43 million cubic meters/day, and are set to continue for the short-term as temperatures are due to fall below average by the end of the week."
Temperatures in London and Glasgow were both above norms by 1 degree Celsius Wednesday, CustomWeather data showed, but are expected to be in line with norms Thursday and London is forecast to fall to 6 C below at the weekend and fall further into the new week.
At midday, National Grid had forecast demand pegged at 279 million cu m, and the system was operating 7 million cu m short.
"Norwegian imports are again lower, and UK production via the Bacton terminal is slightly down," the analyst said.
The Norwegian Langeled pipeline was operating operating at a rate of 51 million cu m/d, down from recent full capacity rates of 70 million cu m/d.
The front month contract also felt the temperature-driven bullish push, posting a 0.55 p/th gain at 68.25 p/th.
The Q2 13 contract rose by 0.10 p/th at 62.55 p/th and seasonal contracts were similarly rangebound with oil prices providing little direction.
ICE February Brent was down 10 cents day-on-day at $111.84/b.
The Summer 13 gas contract gained 0.15 p/th at 62.55 p/th and Winter 13 edged 0.05 p/th higher at 70.60 p/th.
Summer 14 rose by 0.20 p/th at 63.80 p/th.
