Same-day gas falls to near eight-month low on warm weather
Northwest Europe set to get more LNG cargoes than in February
Cargoes from around the world filled with liquefied natural gas are sailing to Europe just when the region doesn’t really need them.
Same-day gas in the U.K. fell the most since October as forecasts for the week showed summer is arriving early, weakening demand for the heating fuel. That comes just as LNG vessels that set sail for Europe when prices were higher are set to arrive and supplies from Norway increase after planned maintenance.
“The bottom fell out of this spot market like a wet grocery bag,” said Jade Kalinowsky, a senior trader at Fredericia, Denmark-based utility Dong Energy A/S. “Temperatures are set to warm up.”
Same-day gas in the U.K. fell as much as 12 percent to 35.7 pence a therm ($4.63 per million British thermal units), the lowest level since Oct. 4, before trading at 37.1 pence at 1:52 p.m. London time, according to broker data compiled by Bloomberg. The contract is trading about 25 percent below its five-year average for the time of year but more than 20 percent above last year’s level.
The Netherlands is set to receive its first LNG cargo from the U.S. in the coming weeks, while Nigerian shipments are reaching France after a pipeline exploded in February, distressing the industry there. Northwest Europe may get 16 tankers total in May, compared with this year’s low of five in February.
Gas flows from Norway into the U.K. jumped almost 50 percent above their 10-day average to almost 90 million cubic meters a day. Seasonal maintenance works that curbed supply have been completed, with no more planned until June 15.
Temperatures in northwest Europe are forecast to average 19 degrees Celsius (66 Fahrenheit) for the rest of Monday, more than 3 degrees Celsius above the seasonal norm, according to data from the Weather Co. The weather is seen warming further this week, and temperatures will likely stay above average for the rest of the summer.