The bullish momentum sparked by storage withdrawals over the weekend and Monday was maintained Tuesday morning on the UK NBP gas trading hub, lifting prompt prices which had a knock-on effect along the curve, a source at a utility said.
Gas for same-day delivery at midday BST on the first day of May was trading at 61.40 pence/therm, up by 1.20 p/th from the end of the previous session, while the day-ahead contract pushed up by 0.50 p/th to 61.70 p/th.
The system was operating short throughout the morning, by around 7 million cubic meters, with forecast demand by National Grid pegged at 232.7 million cu m.
Storage facilities were not contributing to the system during the morning, but a source said, "the fact we needed Rough [storage] gas to balance the system over the weekend and Monday has people nervous and the market is still bullish from that."
A mild Winter resulted in high storage levels, which at the end of March were 80% higher than the same time in the previous year but heavy withdrawals throughout April saw the month end with stocks almost identical to the previous year, data from Bentek Energy showed.
The bullish drive from the front, coupled with forecasts of cool weather, aided in lifting prices for later dated contracts, the source said.
The UK Met Office said in its 6 to 15 day forecast that it will be "largely dry across northern parts of the UK through the weekend with some bright or sunny spells, but it will be rather cold with overnight frost. There will be wintry showers in places, possibly giving snow accumulations over higher ground. Further south, remaining predominantly unsettled with rain or showers, with a threat of hill snow across Wales on Saturday. Breezy at times and feeling cold in the wind and rain."
The new front month, June contract, gained 0.80 p/th in value, changing hands at 58.60 p/th.
Q3 12 heard a similar movement, pushing up by 0.70 p/th to 60.70 p/th.
Gains were a bit more subdued for seasonal contracts with Winter 12 gaining 0.30 p/th at 70.95 p/th, Summer 13 rising by 0.15 p/th to 62.00 p/th and Winter 13 posting a 0.40 p/th gain at 71.15 p/th.
