U.K. Natural Gas Trades Near Three-Week Low on Warmer Weather
U.K. natural gas for next-month delivery traded near the lowest level this month as forecasters predicted warmer-than-normal weather, cutting demand for the heating fuel.
Month-ahead gas fell 0.5 percent, according to broker data compiled by Bloomberg. The low temperature in London will be 9 degrees Celsius (48 Fahrenheit) on Dec. 23 versus a 10-year average of minus 3 degrees, CustomWeather Inc. data on Bloomberg show. Demand in the 24 hours to 6 a.m. tomorrow will be 297 million cubic meters versus an average this month of 328 million, National Grid Plc (NG/) data show.
Gas for January lost 0.3 pence to 66.65 pence a therm at 4:18 p.m. London time. That’s equivalent to $10.84 per million British thermal units and compares with $3.45 per million Btu of front-month U.S. gas. The British contract declined to 66.3 pence on Dec. 13, its lowest this month.
Within-day gas fell 0.2 percent to 65.85 pence a therm while day-ahead gas dropped 0.4 percent to 65.5 pence a therm, broker data show.
“With only one month to go in 2012, we believe our European gas demand forecast of minus 2.4 percent now harbors more downside than upside,” Thierry Bros, European gas analyst at Societe Generale SA in Paris, said in a research report yesterday. “European gas demand reached a peak in 2005. More than 12 years of growth has been erased to date. The European gas industry needs to think fast about how to boost demand.”
Imports from Norway, the U.K.’s largest source of foreign gas, were at a rate of 110 million cubic meters a day, in line with the 30-day average, Gassco AS data show.
Flows from Belgium were at 9 million cubic meters a day, compared with a mean since Oct. 1 of 15 million, Interconnector Ltd. data show.
Gas accounted for 35 percent of U.K. power production at 4:15 p.m., grid data show. Coal also generated 35 percent, nuclear 15 percent and wind 8.5 percent.
Next-day electricity climbed 0.8 percent to 48.25 pounds a megawatt-hour, broker data show.
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