U.K. stores of natural gas, pushed to record lows by a dearth of tanker imports, will be exhausted in about two weeks unless temperatures rise, reducing demand for the heating fuel.
The CHART OF THE DAY shows inventories at Rough, the U.K.’s largest gas-storage facility, are at the lowest level on record for the time of year. There were 6,490 gigawatt-hours of gas in storage yesterday, which will be depleted in 15 days if the average rate of withdrawal over the past two weeks continues, according to National Grid Plc data.
U.K. gas prices, a benchmark for Europe’s 800 billion-euro ($1 trillion) market, are susceptible to sudden moves after imports of liquefied natural gas slumped by 53 percent in the five months through February from a year earlier, according to data compiled by Bloomberg. Gas for same-day delivery jumped 64 percent to a seven-year high of 115 pence a therm yesterday as unplanned maintenance cut supplies from Norway.
“We’ll probably run out of storage in just over two weeks if stocks continue to be drawn down at this rate,” Craig Lowrey, a consultant at The Utilities Exchange Ltd., said yesterday by telephone from Ipswich, England. “With very little LNG coming to the U.K. there are fewer alternative sources of gas and that increases the risks if we do get to that point.”
Higher prices raise costs for utilities, such as Centrica Plc and Electricite de France SA, which tend to hold rates stable for consumers in the short term. Centrica raised bills an average 6 percent in October, while EDF increased them by about 11 percent.
The average temperature in London during the last month was 3.4 degrees Celsius (38 Fahrenheit) down from 5.3 degrees a year earlier and 7.1 degrees in 2011, CustomWeather Inc. data on Bloomberg show.