U.K. Gas Declines as Warmer-Than-Average Weather Reduces DemandMatthew Brown
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 dropped, according to broker data compiled by Bloomberg. The average temperature for the rest of the day will be 6.8 degrees Celsius (44 Fahrenheit), compared with a seasonal norm of 3.4 degrees, MetraWeather data using the ECMWF model showed. Pipeline imports from Belgium were as high as 78 million cubic meters a day, according to National Grid Plc.
Gas for today fell 25 percent to 74 pence ($1.10) a therm at 5:15 p.m. in London, after climbing to a seven-year high of 120 pence yesterday. Next-day gas slid 1.6 percent to 74.8 pence a therm, or $11.30 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 data showed. Flows were at 15 million cubic meters a day today.
Power use at Norway’s Ormen Lange gas field in the North Sea will return to normal within 24 hours, Royal Dutch Shell Plc said at about 2 p.m. London time today.
Flows from Norway, the U.K.’s biggest source of imported gas, were at 89 million cubic meters, compared with a 10-day average of 103 million, after dropping to 34 million yesterday, Gassco AS data show. Supply from Ormen Lange will be reduced by 37 million cubic meters a day today and tomorrow because of a power grid failure, Gassco said.
Demand in the 24 hours to 6 a.m. tomorrow will be 313 million cubic meters, the most since March 1, National Grid data showed.
The delivery network will contain 348 million cubic meters of gas at the end of the period, down from 356 million at the beginning, grid data showed.
Centrica Plc 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 Easington terminal on the east coast of England.
Gas accounted for 32 percent of Britain’s power production at 5:15 p.m., grid data showed Coal generated 46 percent, nuclear 14 percent and wind 0.4 percent.
Wind energy will peak at 2,043 megawatts tomorrow after reaching 926 megawatts today, according to Bloomberg data.
Electricity for tomorrow dropped 17 percent to 53.87 pounds a megawatt-hour, broker data showed.