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U.K. Natural Gas Falls as Warm Weather Cuts Demand to Decade Low

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Jan. 4 (Bloomberg) -- U.K. natural gas for same-day delivery declined as warmer-than-normal weather pushed seasonal demand to the lowest in almost a decade.

Day-ahead and next-month gas advanced, according to broker data compiled by Bloomberg. The low temperature in London was 9 degrees Celsius (48 Fahrenheit) today, compared with a 10-year average of 3 degrees, CustomWeather Inc. data on Bloomberg show.

Within-day gas fell as much as 0.7 percent to 62.05 pence a therm and traded at 62.25 pence at 4:25 p.m. London time. February gas rose 0.5 percent to 66.6 pence a therm. That’s equivalent to $10.68 per million British thermal units and compares with $3.25 per million Btu of front-month U.S. gas.

Demand in the 24 hours to 6 a.m. tomorrow will probably be 244 million cubic meters, the lowest for the time of year since at least 2004, National Grid data show.

Imports from Norway, the U.K.’s largest source of imported gas, were at a rate of 105 million cubic meters a day, compared with as much as 125 million yesterday.

Gas accounted for 31 percent of U.K. power production at 4:20 p.m., National Grid data show. Coal generated 39 percent, nuclear 18 percent and wind 3.8 percent.

Electricity for the next working day climbed 5.4 percent to 47.55 pounds a megawatt-hour, broker data show.

To contact the reporter on this story: Matthew Brown in London at mbrown42@bloomberg.net

To contact the editor responsible for this story: Lars Paulsson at lpaulsson@bloomberg.net