U.K. Natural Gas Declines on Fuel Oversupply; Power Price Falls

U.K. natural gas declined as demand for fuel to pump into storage fell and the grid manager predicted an oversupply. Power prices also dropped.

National Grid Plc forecast gas demand at 276 million cubic meters in the 24 hours through 6 a.m. London time tomorrow, about 4 million less than earlier predictions. The nation’s pipelines will hold 350 million cubic meters of the fuel at that time, 11 million more than at the start of today.

“Demand dipped significantly, attributed to lower aggregated storage injection nominations and industrial demand,” Nick Campbell, an analyst at Lytham St. Annes, England-based Inenco Group Ltd., said in an e-mail.

Same-day gas lost 1.3 pence, or 2.2 percent, to 59.3 pence a therm as of 5:55 p.m. in London, according to broker prices compiled by Bloomberg. That’s equal to $9.67 a million British thermal units. A therm is 100,000 Btu.

About half of Britain’s power stations can be fueled from natural gas so the price influences power markets. Baseload power for the next working day lost 90 pence to 51.10 pounds a megawatt-hour, broker data show.

Gas for next month recovered from earlier losses to rise 0.4 percent to 59.55 pence a therm. The equivalent power contract increased 0.6 percent to 52 pounds a megawatt-hour. Bloomberg compiles data from brokers including ICAP Plc, GFI Group Inc. and Spectron Group Ltd.

(Source: http://www.bloomberg.com/news/2011-04-15/u-k-natural-gas-declines-on-fuel-oversupply-power-price-falls.html)