End of Winter Pushes U.K. Natural Gas to Longest Slide in DecadeBy
U.K. front-month futures fall for seventh week on ICE
Warmer weather set to return to Europe next week after chill
The bears are firmly in control of Europe’s oldest natural gas market heading into the final week of the winter season.
The front-month contract is set for a seventh weekly decline, the longest such streak since February 2007, as mild weather is seen damping demand. Above-average supply from Norway, the U.K.’s biggest foreign supplier, is being supplemented with increased LNG as tankers find their way back to northwest Europe after favoring Asia over the winter.
“The milder weather across the continent and the return of warmer weather in the U.K. has exacerbated the slump in demand, along with strong LNG flows and reliable Norwegian imports,” Nick Campbell, an energy risk manager at Inspired Energy Plc in Preston, England, said by email.
The six-month summer season, when demand is typically lower and fuel is used to replenish storage sites for use in the winter, officially starts April 1. Just one of 11 traders, brokers and analysts surveyed this week by Bloomberg News is bullish on U.K. gas, against nine bears.
After dipping below usual levels this week, temperatures are set to rise about 2 degrees Celsius (3.6 degrees Fahrenheit) above normal next week, according to the Weather Co. At least eight LNG cargoes are scheduled to be unloaded at British import terminals this month, four times the total in February, according to port and ship-tracking data compiled by Bloomberg.
Front-month gas fell 1.7 percent to 39.15 pence a therm ($4.89 a million British thermal units) on ICE Futures Europe by 8:18 a.m. London time, extending its weekly drop to 6.1 percent.