UK GAS-Prices soar on cooler weather forecasts, low storage levels
British wholesale gas prices soared on Monday morning as updated weather forecasts predicted colder temperatures to come, while storage stocks remain depleted.
* Day-ahead gas price up 16.20 pence, or 30 percent at 70.00 pence per therm by 0845 GMT.
* “Colder temperatures and the increased risks of running out of storage gas (pushed prices higher,” a gas trader said.
* The cold snap across Europe earlier this March has led to low inventory levels at many of the region’s storage sites.
* Aggregated storage levels in northwest Europe (Belgium, France, Germany and the Netherlands) are below 100 terrawatt hours, well below levels seen at this time of year over the past three years, Thomson Reuters data showed.
* Britain’s stock levels are also low, especially after the closure last year of Centrica’s Rough storage site, which represented 70 percent of the country’s storage capacity.
* Analysts also said temperatures are likely to be much colder for the end of March than previously expected.
* “For instance the average daily temperature on March 19 is forecast at 2 degree Celsius, 4.5 Celsius below normal and around 3.5 Celsius lower than what Friday’s EC00 (temperature run) indicated,” analysts at Thomson Reuters said in a daily research note.
* Home heating accounts for 40 percent of Britain’s gas use, meaning cold temperatures can have a big impact on demand.
* Working day next week contract up 42.00 p at 95.00 p/therm.
* April contract up 4.60 p at 56.00 p/therm.
* Day-ahead gas price at the Dutch TTF hub up 9.05 euros at 29.00 euros per megawatt-hour.
* Benchmark Dec-18 EU carbon contract up 0.16 euro at 11.28 euros per tonne.
Source: Reuters (Reporting by Susanna Twidale Editing by Alexander Smith)