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Barclays Recommends Selling 'Overvalued' U.K. Summer Natural Gas
2010-10-21 12:59:53.997 GMT
By Ben Farey
Oct. 21 (Bloomberg) -- Barclays Plc said it recommends
selling U.K. natural gas for delivery in the six months through
September as prices are too high.
"Our only new position this month is a short in the U.K.
natural gas summer strip for 2011," Barclays Capital analysts
including Suki Cooper said in a research note dated today.
Forward prices look "substantially overvalued," according
to the bank, which pointed to the potential growth in liquefied
natural gas supplies to Europe.
Barclays said the 2011 summer contract is trading above the
average spot price last summer, when gas prices were supported
by "a cold start to the year and lower-than-normal European
summer temperatures."
Gas for next-day delivery in the U.K. averaged 40.73 pence
a therm last summer, according to broker data on Bloomberg.
Summer 2011 gas was little changed at 47.35 pence a therm as of
1 p.m. London time today. That's equal to $7.46 a million
British thermal units. A therm is 100,000 Btus.
For Related News and Information:
Top Gas Story Page: TGAS <GO>
U.K. Gas Prices: UGAS <GO>
--Editors: Rob Verdonck, Jonas Bergman.
To contact the reporter on this story:
Ben Farey in London at +44-20-7673-2369 or
bfarey@bloomberg.net
To contact the editor responsible for this story:
Steve Voss at +44-20-7073-3520 or sev@bloomberg.net.
