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  • January 17th, 2013

U.K. Natural Gas Rises to 11-Month High Amid Freezing Weather

U.K. natural gas for within-day delivery rose to an 11-month high as temperatures fell to the lowest since February, boosting demand for the heating fuel.

Same-day gas surged as much as 9.2 percent, the biggest jump since April, according to compiled broker data. The low temperature in London was minus 6 degrees Celsius (21 Fahrenheit) today and will drop to minus 9 degrees Jan. 20, data on Bloomberg showed.

The Met Office said on its website snow will be widespread through tomorrow morning and continuing through the afternoon and evening. The maximum temperature in London will be zero degrees while a southeasterly wind will create a bitterly cold feeling.

Gas for today added as much as 6.4 pence to 76 pence a therm, the highest price since Feb. 10, and traded at 72.25 pence a therm at 9:24 a.m. London time. Month-ahead gas climbed 1.6 percent to 68.5 pence a therm. That’s equivalent to $10.97 per million British thermal units and compares with $3.40 per million Btu of front-month U.S. gas.

The exchange used by network manager National Grid to buy or sell gas to ensure the system’s safe operation showed Within-day gas climbed as high as 1 pound a therm overnight which is the first time since January 2010.

Demand in the 24 hours to 6 a.m. tomorrow was predicted to be 392 million cubic meters, compared with a seasonal norm of 309 million, National Grid Plc (NG/) data shows. Grid data shows the delivery system will contain 344 million cubic meters of gas at the end of the period, down from 349 million at the beginning.

Gas Imports

Imports from Norway, the U.K.’s biggest source of imported gas, were at a rate of 129 million cubic meters a day after reaching 138 million yesterday, the most since Gassco AS began publishing the data in January 2012.

Imports from Belgium were at 29 million cubic meters a day pace, data from Interconnector U.K. Ltd. showed.

Statoil ASA (STL) of Norway said gas production was reduced by 10.8 million cubic meters a day for one day.

Gas accounted for 34 percent of U.K. power production at 9 a.m., grid data show. Coal generated 43 percent, nuclear 18 percent and wind 2.3 percent.

Electricity for tomorrow fell 0.5 percent to 53.75 pounds a megawatt-hour, broker data shows.

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