British Spot Gas Prices Stay High On Cold Weather, Low Stocks

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British wholesale gas prices remained high on Tuesday morning as cold weather kept demand at around 37 percent above the seasonal norm and gas storage levels were extremely low.

* Spot gas prices above 100 p/therm

* Cold weather to last all week - MetOffice

* Gas storage tanks 90 pct empty

* Some relief from LNG tankers

British wholesale gas prices remained high on Tuesday morning as cold weather kept demand at around 37 percent above the seasonal norm and gas storage levels were extremely low.

Gas prices for delivery within the day as well as for next-day deliveries were both above 100 pence per therm at 0830 GMT, at about the same levels as late on Monday. That compares with a near record on Friday of about 150 pence. ().

The high prices were a result of unseasonably low temperatures across Britain for much of March. UK gas demand was expected to be 370 million cubic metres (mcm) on Tuesday.

The high demand has depleted gas storage sites by around 90 percent (). With just over 500 mcm left in tanks, the reserves are enough to cover 1.36 days worth of current demand.

Britain's MetOffice said that the cold weather would last until at least the end of the week, with conditions remaining "cold or very cold, with moderate to severe frosts overnight".

The average daily depletion rate since the beginning of the month, when the cold spell started, has been 0.44 percent, down from 0.55 percent late last week, according to Reuters calculations.

Projecting current depletion levels ahead, Britain could run out of gas storage by around April 8 or 9. ()

LNG TANKERS BRING RELIEF

Some relief to Britain's gas infrastructure was seen to come from overseas cargoes of liquefied natural gas (LNG).

With gas inflows seen at 391.7 mcm, the system was expected to be oversupplied by around 21.7 mcm, according to data from National Grid, providing the opportunity for some small gas storage injections.

Traders said the additional supplies were coming from LNG tankers.

"The high spot prices have attracted some LNG tankers that would usually go to Asian buyers, where prices are normally higher than in Britain," one gas trader said.

"This will bring a bit of relief to the system here, but the situation remains incredibly tense, because just one unplanned pipeline outage would seriously threaten supplies," he added.

Two tankers with a combined capacity of around 527,000 cubic metres have delivered their LNG to Britain this week, and another 350,000 cubic metres are expected to come in from two ships by April 3.

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