U.K. Gas Declines as Warmer-Than-Average Weather Reduces Demand
U.K. natural gas for same-day delivery fell by the most in a year as temperatures rose above normal, cutting demand for the heating fuel, and imports from Belgium climbed to a record.
Day-ahead gas also declined, according to broker data compiled by Bloomberg. The average temperature for the balance of the day will be 7.9 degrees Celsius (46 Fahrenheit) compared with a seasonal norm of 4.6 degrees, MetraWeather data using the ECMWF model shows. Imports from Belgium were as high as 71 million cubic meters a day, the most since at least 2001, according to Interconnector (U.K.) Ltd.
Gas for today fell 24 percent to 75 pence a therm at 9:59 a.m. London time after climbing to a seven-year high of 120 pence yesterday. Next-day gas slid 1 percent to 75.25 pence a therm. That’s equivalent to $11.43 per million British thermal units.
Prices surged yesterday as reduced production from Norway left the system short of gas amid dwindling reserves. The U.K. will run out of gas storage in about two weeks if withdrawals continue in line with the two-week average of 441 gigawatt-hours (41 million cubic meters) a day, Bloomberg calculations show. Flows were at 26 million cubic meters a day today.
Demand in the 24 hours to 6 a.m. tomorrow will be 282 million cubic meters, after reaching 279 million on March 2, the least since Jan. 7, National Grid Plc (NG/) data show.
The delivery network will contain 389 million cubic meters of gas at the end of the period, up from 356 million at the beginning, grid data show.
Flows from Norway, the U.K.’s biggest source of imported gas, were at 85 million cubic meters compared with a 10-day average of 103 million, Gassco AS data show. Supply from Norway’s Ormen Lange field in the North Sea will be reduced by 37 million cubic meters a day today and tomorrow because of a power grid failure, Gassco said.
Centrica Plc (CNA) started production from its York platform in the North Sea today, the company said on its website. The field will produce 120 million cubic feet (3.4 million cubic meters) of gas a day and will flow into the U.K.’s Easington terminal on the east coast of England.
Gas accounted for 33 percent of U.K. power production at 9:45 a.m., grid data show. Coal generated 45 percent, nuclear 14 percent and wind 1 percent.
Wind energy will peak at 1,817 megawatts tomorrow after reaching 888 megawatts today, according to Bloomberg calculations.
Electricity for tomorrow dropped 17 percent to 53.87 pounds a megawatt-hour, broker data show.
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