U.K. Spot Gas Erases Gain as Norway Outages Set to End Next WeekAnna Shiryaevskaya and Isis Almeida
U.K. natural gas erased earlier gains as outages in Norway, Britain’s biggest supplier, are set to end by next week, easing concerns supplies will fall short of demand as the weather is forecast to turn colder.
The same-day gas contract was unchanged after rising as much as 2.2 percent today, while day-ahead fuel declined 0.1 percent, according to broker data compiled by Bloomberg. Outages at three of Norway’s offshore gas fields including Troll, the nation’s largest, are set to end by next week, according to data from pipeline operator Gassco AS.
Norwegian flows into Britain were at 76 million cubic meters (2.7 billion cubic feet) a day, or about a quarter of forecast demand, up from as low as 67 million yesterday, Gassco data showed. That’s still 23 percent less than the 30-day average. Within-day prices are heading for the biggest weekly gain since Nov. 28 as the unplanned outages limited supplies.
“The bullish impetus provided by lower supplies throughout this week is gone,” Guillermo Baena, a market analyst at Ener-g Procurement Ltd. in Studley, England, said by e-mail today, adding that he expected supplies from Norway at “healthy levels.” “Prices have returned to their bearish trend seen over the last months.”
Same-day gas was unchanged at 46.50 pence a therm ($7.04 a million British thermal units) by 4:49 p.m. London time after rising to 47.5 pence a therm, broker data show. The next-day contract slipped 0.2 percent to 46.55 pence a therm.
Troll output will be cut by 19 million cubic meters a day today and 5 million tomorrow due to “process problems,” Gassco said. The outage follows a halt earlier this week, which cut supply by as much as 105 million cubic meters, more than a third of current U.K. demand.
Troll A production was shut yesterday after the platform was hit by lightning, which triggered a fire alarm, Statoil ASA spokesman Oerjan Heradstveit said late yesterday. He declined to provide updates when contacted today.
“The biggest issue is Troll, just simply because of its huge size,” Craig Lowrey, a consultant at UX Energy Services in Ipswich, England, said today by phone today. “The problems are still ongoing, it’s not completely resolved as yet.”
Norwegian outages come just as the weather is set to turn cold. Average temperatures in northwest Europe and the U.K. are forecast to fall to 1.2 degrees Celsius (34 degrees Fahrenheit) next week, compared with a 10-year average of 4.1 degrees, data from WSI Corp. using the GFS model on Bloomberg show.
“A snap cold is forecast in two weeks, with temperatures below 0 for the most of the week,” Baena said. “That could potentially support prices. However, my personal opinion is that prices would continue falling till mid-February.”