↑ Scroll to top

UK gas curve extends gains as firm oil lures buyers

Published: July 3, 2012 | 9:36 am
Text size: -A +A

* Brent rises on Strait of Hormuz tensions, Norway output cut
* Prompt gas up as Dutch exports drop leaves system short

British benchmark front-season gas prices continued rising towards one-month highs on Tuesday as oil prices extended gains on the back of threats to oil transport through the Strait of Hormuz and Norwegian production cuts.

The winter 2012 gas price traded up to 65.25 pence per therm on Tuesday, the highest since June 11, while summer 2013 gained 0.30 pence to 58.55 pence.

Brent crude climbed above $98 per barrel earlier in the session on renewed threats by Iran to interrupt oil tanker traffic in the Strait of Hormuz, a shipping route that is also key to Europe’s liquefied natural gas (LNG) deliveries from top producer Qatar.

Norway also delayed its first oil cargoes after a week-long strike has cut production and started affecting exports. [ID: nL6E8I26PB]

European stock markets also supported upward momentum as traders expected major central banks to take more policy action after weak manufacturing data showed the impact of the euro zone debt crisis.

Closer in, prompt gas prices also gained, rising 0.30 pence to 56.80 pence on the within-day contract as low exports from the Netherlands left the market undersupplied, while storage withdrawals were used to try to fill the supply gap.

Traders expected prices to continue rising, reflecting price movements in Monday’s session.

“Just look at what happened yesterday. Currently the day is pretty much a mirror image,” one UK gas trader said.

Imports from the Netherlands fell to zero at around 0700 GMT, National Grid data showed, after flows through the Dutch BBL pipeline have been volatile for days.

In Britain’s power market, long-term prices also tracked bullish trading in the wider energy complex and gained day on day.

Winter 2012 baseload power rose 60 pence to 47.35 pounds per megawatt-hour (MWh).

reuters

VN:F [1.9.10_1130]
Rating: 0 (from 0 votes)
Share on Facebook Share on Twitter
More posts in category: Latest News
  • Qatar Airways to host 70th IATA AGM
  • Oil gains on cheap ECB loans, Iran fears
  • 2014 Chevrolet Impala In Depth
  • Oil price slips on weak economy