Crude prices up; UK natural gas prices still high

Crude oil prices were up on Tuesday, with Brent crude April contracts on the International Petroleum Exchange gaining around $1 to $63.18 per barrel by late afternoon in London.  West Texas Intermediate crude for April delivery was also up, though not as much, adding 43 cents to $62.20 per barrel in early afternoon trade on the New York Mercantile Exchange.  Nymex unleaded gasoline was up 7.7 cents to $1.8210 per gallon, up 30 percent in a month as concerns of supply shortages this summer begin to be felt.

Most of the attention, however, was on natural gas prices in the UK, which were down after reaching record highs on Monday but still remained much higher than they were last week.  The wholesale price for gas delivered during the day was down to 150p per therm by the end of the session in London, but they had been up to 255p per therm during the day, as high as it had climbed on Monday.  Prices for gas delivered tomorrow were also down by about 40 percent to 158p, still higher than last week’s levels.  Deliveries for next week gained around 20p to 155p per therm on the concern that cold weather might extend past the weekend.

Besides the cold weather, other reasons for the sharp increase in UK gas prices include production delays in Norway, which exports significant amounts of gas to the UK, and rapidly declining supplies in storage within the UK after the closure of the nation’s largest storage facility due to a fire.  That facility is not expected to reopen until the beginning of May.