U.K. natural gas for within-day delivery advanced as demand rose to the highest since Jan. 25. Inter-dealer brokers agreed to start indexes for U.K. and European gas hubs.
Within-day gas increased 0.2 percent to 67.6 pence a therm at 6 p.m. London time, according to data from brokers. The March contract slid 0.8 percent to 66.05 pence a therm on ICE Futures Europe in London. That’s equivalent to $10.33 per million British thermal units and compares with $3.45 per million Btu of front-month U.S. gas.
Demand in the 24 hours through 6 a.m. London time tomorrow will be 328 million cubic meters, according to data from National Grid Plc. Withdrawals from the Rough gas storage site were cut by 50 percent for one hour from 3 p.m. London time today, Centrica Plc said on its website.
The so-called “Tankard” indexes will cover the National Balancing Point in U.K., the Title Transfer Facility in Netherlands, Netconnect Germany and Gaspool in Germany, according to a joint statement from ICAP Plc, Marex Spectron Group Ltd. and Tullett Prebon Plc. They will be calculated using transaction prices for contracts for physical delivery at each hub, the brokers said.
The U.K.’s $480 billion gas market has come under the spotlight after a journalist at the ICIS price agency reported deals he suspected were being done below “prevailing” levels. Seth Freedman notified his managers of what he suspected was an attempt to manipulate assessments on Sept. 28. ICIS reported the case to the Office of the Gas and Electricity Markets, which said in a Nov. 13 statement it’s “looking into the issue.” The Financial Services Authority said Nov. 12 it had received the information.
“Providing robust and transparent indexes based on actual trades will go a long way toward increasing the level of transparency in the European natural gas market,” Richard Frape, director of market services at Marex Spectron, said in today’s statement. “This collaboration between the three largest brokers in the over-the-counter market for European natural gas is likely to provide a sound foundation for related physical activity.”
The three brokers arranged an estimated 450 billion euros of physically settled gas forwards last year, they said. The group plans to publish day-ahead and month-ahead indexes for NBP, TTF, NCG and Gaspool every day and weekend indexes on the last working day of the week at 6 p.m. London time. They will also release a “Tankard 15:30” index for NBP at 4 p.m. after an assessment window from 3:25 p.m. to 3:30 p.m., according to the statement.