Saturday, March 10, 2012

Gas extends gains on bank buying, LNG concerns

London (Reuters) - Gas prices extended gains on Friday morning, led by financial buying, weak liquidity and a worsening liquefied natural gas (LNG) supply backdrop, trading sources said.

Monday gas made gains of 0.80 pence to 60.10 pence per therm in early trading, also reflecting the onset of slightly cooler weather following a milder-than-average weekend forecast.

Gas for immediate delivery traded marginally higher at 59.85 pence despite an oversupplied transmission system as demand turned 10 percent below the seasonal average.

The UK was set to consume 268 million cubic meters (mcm) of gas on Friday, a figure that includes exports to Europe of about 28 mcm/day.

"Trading liquidity is low and it seems as if the banks are pushing up the market in the absence of a clear signal for gas prices," a trader with a European utility said.

Further forward, the benchmark summer 2012 gas contract was little changed at 60.30 pence. In contrast, winter 2012/2013 gas saw further gains after Merrill Lynch analysts renewed concerns over LNG supplies in the period in a note issued on Thursday.

Mild temperatures this weekend will extend into next week, according to the UK's Met Office.

In the power market, day-ahead baseload power for 24-hour delivery traded at 43.60 pounds per megawatt hour.

(Reporting by Oleg Vukmanovic; Editing by Erica Billingham)

Source: http://news.yahoo.com/gas-extends-gains-bank-buying-lng-concerns-122053703.html

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