U.K. Natural Gas Rises as LNG Flows Decline, Freeze Continues
U.K. natural-gas contracts advanced after deliveries from liquefied gas terminals dropped while freezing temperatures boosted heating demand.
Gas flows declined from the Isle of Grain near London, BG Group Plc’s Dragon LNG terminal and the South Hook facility in Wales, National Grid Plc data show.
Gas for January delivery gained as much as 2 pence, or 3.4 percent, to 61.45 pence a therm. It was at 60.5 pence as of 4:30 p.m. in London. That’s equal to $9.55 a million British thermal units. A therm is 100,000 Btus. The contract reached a 22-month high of 62 pence a therm on Dec. 6.
“For the remainder of December and into the start of the New Year, temperatures look set to remain very cold, well below average for much of the U.K., with often widespread frost and the risk of ice,” the Met Office said on its website.
Gas for the first quarter of next year gained 0.65 pence, or 1.1 percent, to 59.75 pence a therm. Gas for immediate delivery gained 1.1 pence at 63.9 pence a therm.
London temperatures may drop to minus 9 degrees Celsius (16 Fahrenheit) by Dec. 20 from today’s low of minus 4, according to CustomWeather Inc. data on Bloomberg. Colder weather increases demand for gas-fired heating and may allow storage inventories to be replenished.
Stockpiles at Rough, the country’s largest gas-storage facility, fell to 27,470 gigawatt-hours as of 6 a.m. today, 27 percent less than at the same time last year, grid data show.
National Grid forecast demand will be 447 million cubic meters at 6 a.m. tomorrow, 93 million more than normal for the time of year. The U.K.’s highest recorded daily gas demand was 465 million cubic meters in January.
To contact the reporters on this story: Ben Farey in London at bfarey@bloomberg.net
To contact the editor responsible for this story: Stephen Voss on sev@bloomberg.net
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