U.K. Natural Gas Advances as Freezing Weather Boosts Demand

U.K. natural gas for next-working day delivery rose as forecasts for freezing weather boosted demand for the heating fuel.

The day-ahead contract climbed as much as 2.9 percent, according to broker data compiled by Bloomberg. The low temperature in London was minus 1 degree Celsius (30 Fahrenheit) today and will be minus 3 degrees on Jan. 14, compared with a 10-year average of 2 degrees, CustomWeather Inc. data on Bloomberg show.

Gas for Jan. 14 gained 1.8 pence, or 2.7 percent, to 68.8 pence a therm at 4:48 p.m. London time, after reaching 68.95 pence, the highest level since Dec. 7. Month-ahead gas advanced 0.5 percent to 67.5 pence a therm. That’s equivalent to $10.89 per million British thermal units and compares with $3.29 per million Btu of front-month U.S. gas.

Demand in the 24 hours to 6 a.m. tomorrow will be 321 million cubic meters, down from 326 million yesterday, yet above the seasonal normal of 306 million, National Grid Plc data show. Flows increased to a rate of as much as 358 million cubic meters a day, the most since Dec. 14, grid data show.

Imports from Norway were as high as 132 million cubic meters a day, the fastest pace since Jan. 1, before slowing to 118 million, Gassco AS data show.

Output from Norway was cut by a total of 17.5 million cubic meters a day in three separate outages, Statoil ASA said on its website.

Gas accounted for 34 percent of U.K. power production at 4:45 p.m., grid data show. Coal generated 42 percent, nuclear 17 percent and wind 1.1 percent.

Electricity for the next working day jumped 6.7 percent to 53.50 pounds a megawatt-hour, broker data show.

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