Despite her terminal condition she had been told she would be discharged from the hospice and placed in a residential care home soon, the MailOnline reported.
Her brother Mark Smith told the inquest: "That put her in good spirits, although I had been told she was healthier in the body than she was in the mind."
He described arriving at the hospice to visit her before being taken into a side room.
He was then informed his sister had "blown herself up in the smoking room".
Smith told coroner Tony Williams his sister would have been aware of the dangers of smoking while using her oxygen tank but added that she had never said anything that led him to think she wanted to take her own life.
Medical officer Dr Howard Friend said he had visited Reid on the morning of September 17 as she had fallen out of bed in the night.
About 1.30pm he received a phone call from head nurse Phil Edward.
"He said she had blown herself up in the smoking room. I rushed over. I believe death was instantaneous. Her body had been thrown backwards in the chair and was badly charred."
He also said Reid would have been warned of the dangers of smoking while using her oxygen tank when she was admitted to the hospice.
Lynn Bromfield, who had been working as a healthcare assistant at the hospice, remembered wheeling Reid into the room.
She told the hearing she had no knowledge of the risk of smoking and naked flame around oxygen.
"It didn't even cross my mind that it was an issue," she said.
She added that she'd had "some" training in relation to fire safety, but "hadn't made the connection between smoking and oxygen".
"Sharon said to me 'I can't go without my oxygen'," she said.
She continued: "I don't remember the time, but the call bell panel was flashing for the smoking room.
"I went along, I looked through the window. To my horror, I saw Sharon in the room, she was on fire.
"I could see the flames. There was nothing I could do. I pressed the alarm to call for more help."
The hearing heard no warning signs were posted at the entrance to the smoking room.
The inquest is expected to conclude today.