Prompt Prices on The UK's NBP Gas Trading Hub Rose

Prompt prices on the UK's NBP gas trading hub rose Wednesday morning as demand exceeded expectations and the market sought to maintain a premium to Continental prices in order to secure supply, a market source said. 

At 1200 GMT, the within-day contract was valued at 68.65 pence/therm, up by 1.25 p/th from Tuesday's close, and the day-ahead price rose by 0.80 p/th to 68.80 p/th. 

"We need to maintain a premium over the Continent to attract the volume through the [UK-Belgium] Interconnector and the Norwegian pipeline," a market source said. 

The premium for day-ahead gas in the UK over Belgium's Zeebrugge hub fell to a two week low Tuesday of 1.70 p/th. 

"The system opened short by 6 million cubic meters; the narrowing of the spread between UK and Continental prices has seen imports through the Interconnector and BBL reduce this morning with BBL flowing at 32 million cu m, down from yesterday's average of 38 million cu m," a market analyst said. 

Gas flows on the Interconnector pipeline fell to 15 million cu m Wednesday from 24 million cu m Tuesday, National Grid showed. 

Forecasts on Tuesday for Wednesday's gas demand were breached by 7 million cu m with Grid showing expected demand at 1200 GMT at 388 million cu m. The system was operating long by 8 million cu m. 

Norwegian gas export system operator Gassco said Wednesday full restart of Statoil's Troll A gas field would be delayed to Sunday from Thursday after compressor problems have forced it to reduce flow since Monday. 

Despite the outage, gas flows from Norway to the UK via the Langeled pipeline remained strong at 67 million cu m/day. 

Gas for February rose by 0.25 p/th to 66.75 p/th and Q2 13 gained 0.10 p/th at 62.45 p/th. 

Movements along the curve were largely flat, reflecting the oil market. 

Crude futures were flat and rangebound, extending the recent theme for markets in general of struggling for any meaningful direction ahead of the US trading day. 

At 1010 GMT, the March ICE Brent contract was down 6 cents at $112.36/barrel. 

Summer and Winter 13 and Summer 14 gas contracts each rose by 0.10 p/th at 62.40, 70.60 and 64.00 p/th, respectively.