U.K. natural gas for next month trimmed its biggest monthly advance in almost two years as technical indicators showed that the contract rose too fast.
Within-day gas climbed to its highest level since February, according to broker data compiled by Bloomberg, as Statoil ASA cut production at its Norwegian fields. The relative strength index on the month-ahead contract was 83 yesterday. A reading above 70 may indicate that a security is overbought.
Gas for the coming month dropped 0.7 percent to 68.7 pence a therm at 4:36 p.m. London time. That’s equivalent to $10.94 per million British thermal units and compares with $3.50 per million Btu for front-month U.S. gas.
Next-month gas has risen 16 percent since Sept. 24, the biggest monthly gain since the period to Sept. 24, 2009. The contract reached 69.5 pence a therm yesterday, the most since November 2008.
Weather Services International Ltd. said yesterday that November in the U.K. will be cooler than usual while December and January will be warmer than average.
The low temperature in London will drop to minus one degree Celsius (30 Fahrenheit) on Nov. 1 and Nov. 5, compared with a 10-year average of 6 degrees, CustomWeather Inc. data on Bloomberg show.
Statoil reduced availability by 9.8 million cubic meters a day for six hours from about 5 a.m. today London time, and will reduce output by 10 million cubic meters a day for 24 hours from tomorrow, it said on its website.
Demand in the 24 hours to 6 a.m. tomorrow will be 218 million cubic meters, down from 235 million yesterday, National Grid Plc data show. The delivery network will contain 332 million cubic meters of gas at the end of the period, down from 338 million in the previous period.
Power for tomorrow slid 0.3 percent to 50 pounds a megawatt-hour, broker data show.