U.K. Natural Gas Jumps to 1-Year High on Weather, Storage Limits
U.K. day-ahead natural gas prices surged to their highest in more than a year as Centrica Plc (CNA) restricted withdrawals from the nation’s biggest gas store and freezing weather gripped Europe’s biggest market.
Gas for tomorrow jumped as much as 8.3 percent while the within-day contract rose as much as 11 percent. Minimum temperatures in London are forecast to be below freezing in seven of the next 10 days, according to CustomWeather Inc. on Bloomberg. The 30-year average minimum is 3 degrees (37 Fahrenheit).
Cold weather drove withdrawals of the fuel to a six-day high yesterday, when 4.5 percent the nation’s reserves were removed from stores. Centrica Plc’s Rough storage field in the North Sea, Britain’s largest, said today it would limit withdrawal capacity by 25 percent for the four hours through 2:15 p.m. London time. Day-ahead gas has averaged 70 pence so far this year, 17 percent more than in the year-earlier period.
“So far this year, inventories have seen one of the largest draws ever and the premium of U.K. gas prices to other European benchmarks widened sharply in order to attract greater imports from neighboring countries,” Sabine Schels, a commodity strategist at Bank of America Corp. in London, said in a research note e-mailed today and dated yesterday. “The U.K. gas market has yet again been exposed to its deep-rooted supply problems.”
The day-ahead contract jumped as much as 7.5 pence to 98 pence a therm, according to broker data compiled by Bloomberg. That’s the highest price since Feb. 8, 2012, and is equivalent to $14.58 per million British thermal units. The price was at 96.25 pence at 12:38 p.m. London time. Within-day gas traded at 97.50 pence after rising 10 pence to 101 pence.
Yesterday’s withdrawal from stores including Rough was 258 gigawatt-hours, cutting the level to 5,476 gigawatt-hours, according to data from National Grid Plc (NG/), the network manager. At that pace, they will reach the record low set in March 2010 of 2,924 gigawatt-hours in less than 10 days.
To contact the reporter on this story: Mathew Carr in London at email@example.com
To contact the editor responsible for this story: Lars Paulsson at firstname.lastname@example.org