UK natural gas prices triple in cold weather

Cold weather that was forecast to continue through the week and only around 10 days worth of natural gas in storage drove prices much higher in the United Kingdom on Monday.  Complicating the picture was the fact that the largest storage facility in the UK will not be back in operation until May and a dearth of imports from Europe due to cold weather there as well.

Same-day prices were up to 255p per therm during the day, the highest UK price for gas since the market was deregulated in the 1990s, but fell back to 220p per therm later in the day in London.  Friday’s closing price was 75p per therm.  Prices for delivery at later times were also up significantly.  The price of electricity also rose, reflecting the fact that 40 percent of the power generated in the UK comes from gas.

Forecasts of cold weather in Europe and the US also supported crude oil prices.  April delivery Brent crude on the International Petroleum Exchange were up 34 cents to $61.17 per barrel late in the day in London.  West Texas Intermediate crude April contracts, meanwhile, added 59 cents to $60.50 per barrel in early afternoon trade on the New York Mercantile Exchange.