U.K. natural gas fell the most in more than two months as demand fell to below-usual levels because of warmer-than-normal weather and maintenance at the Interconnector pipeline to Belgium.
Gas for within-day delivery in the U.K., Europe’s biggest market, fell as much as 7.2 percent on the National Balancing Point hub, the biggest decline since April 7, according to broker data compiled by Bloomberg. Works started Wednesday will completely shut the pipeline through June 25, halting exports from Britain to continental Europe.
Temperatures across the U.K. will be more than 2 degrees Celsius (3.6 Fahrenheit) above the 10-year average for the rest of the day, according to WSI Corp. By this weekend, Britain will be 2 to 3 degrees Celsius warmer than normal, Abigail Mason, a forecaster at Reading, England-based MetraWeather (U.K.) Ltd., said in a report e-mailed Thursday. Gas consumption usually falls at this time of the year as demand for heating slows.
“Milder weather through to the weekend is likely to reduce domestic consumption,” Guillermo Baena, a market analyst at Studley, England-based broker and consultant Ener-g Procurement Ltd., said in a report Thursday. “Maintenance on the Interconnector should reduce demand as a whole.”
U.K. within-day gas fell as low as 42.7 pence a therm ($6.60 a million British thermal units) on NBP by 2:44 p.m. London time, broker data showed. Day-ahead fuel in the Netherlands, Europe’s second-biggest market, slid 1.7 percent to 20.30 euros ($22.78) a megawatt-hour on the Title Transfer Facility hub, the data showed.
Gas demand including exports and power generation was forecast 0.7 percent below the seasonal norm at 166 million cubic meters (5.85 billion cubic feet), according to National Grid Plc, the U.K.’s network operator. Supplies were forecast to outpace consumption by 12.4 million cubic meters. Temperatures for the rest of the day are forecast at 18 degrees Celsius compared with a 10-year average of 15.6 degrees, according to WSI using the ECMWF model.
An injection outage at the Aldbrough gas storage facility also contributed to a decline in demand, Marcel Boonaert, head of trading at Wingas U.K. Ltd., said in a report e-mailed Thursday. The halt will last until 5 p.m. London time Thursday, operator SSE Plc said on its website.