U.K. natural gas prices for next-week delivery rose to the highest in more than seven years as forecasters predicted temperatures 8 degrees Celsius below normal and storage inventories approached record-low levels.
Within-day, next-day and month-ahead contracts also climbed, according to Marex Spectron Group Ltd. data compiled by Bloomberg. The average U.K temperature will be 0.2 degree Celsius (32 Fahrenheit) next week, compared with a 10-year average of 8.2 degrees, MetraWeather data using the ECMWF model show. Inventories at Rough, Britain’s largest gas-storage facility, fell to 3,029 gigawatt-hours yesterday, approaching a record 2,924 gigawatt-hours reached in March 2010, National Grid Plc data show.
The weather in the U.K. next week will be “breezy and very cold for the time of year,” the Met Office said on its website. There will be “a lot of dry weather with a mixture of variable cloud, snow showers in northern parts especially, and sunny intervals. Temperatures are likely to be well below normal in all areas.”
Next-week gas jumped as much as 14 percent to 98 pence a therm at 4:30 p.m. London time. Within-day gas added 11 percent to 96.75 pence a therm and the day-ahead contract increased 11 percent to 96.5 pence a therm.
Gas for April climbed 1.2 percent to 69.65 pence a therm. That’s equivalent to $10.54 per million British thermal units and compares with $3.95 per million Btu of front-month U.S. gas.
Rough inventories fell 283 gigawatt-hours (27 million cubic meters) yesterday, leaving less than 11 days of storage if withdrawals continue at the same rate, according to National Grid data. Flows from Rough were at a rate of 10 million cubic meters a day today.
Imports from Belgium were at 71 million cubic meters a day, approaching a record 78 million, National Grid data show. Flows from Norway, the U.K.’s biggest source of imported gas, were at 118 million cubic meters a day, versus a 10-day average of 100 million, Gassco AS data show.
Demand in the 24 hours to 6 a.m. tomorrow will be 319 million cubic meters, the most since March 14, and up from a seasonal norm of 276 million, grid data show.
Norwegian gas production was cut by 12.2 million cubic meters a day today, Statoil ASA said on its website.
Gas accounted for 35 percent of U.K. power production at 4:30 p.m., grid data show. Coal generated 40 percent, nuclear 16 percent and wind 2.7 percent.
Electricity for tomorrow surged 10 percent to 67.20 pounds a megawatt-hour, according to broker data compiled by Bloomberg. The next-week contract rose 8.7 percent to 63.85 pounds a megawatt-hour, the highest since January 2009.
RWE AG will shut its Fawley oil-fed power plant at noon on March 27, it said today on its website. While the two 500-megawatt units are closing because they are too expensive to run, there are no plans to shut four gas turbines at the site, RWE said.