March 2, 2018 / 8:03 AM / 2 years ago

Arctic blast saps British gas supplies, price hits high

OSLO (Reuters) - British gas prices spiked again in volatile trading on Friday as an ongoing cold snap raised concerns about supplies.

FILE PHOTO: Families and commuters make their way across snow covered Clapham Common in London, Britain, February 28, 2018. REUTERS/Dylan Martinez/File Photo

“Today was absolute panic,” one trader said, adding that it was “still a highly unusual situation” as prices for within-day gas delivery reached 350 pence per therm at one point, matching Thursday’s more than 10-year record.

Southern Britain could see average temperatures of 0 degrees Celsius, but they are forecast to rise to 5 degrees on Saturday and as high as 9 degrees on Monday, Britain’s Met Office said.

Although Britain’s gas system opened largely balanced with a shortfall of just 4.4 million cubic metres (mcm) per day, National Grid data showed, the shortfall later widened to 12.4 mcm, triggering fresh concerns over supply.

The within-day gas delivery contract had initially opened 30 percent lower, after National Grid withdrew a gas supply warning it had issued on Thursday, saying that new supplies were reaching the market, and some outages which had supported prices were resolved.

An outage at the Entry SEGAL pipeline system was cutting imports by 18 mcm per day, although an outage at Norway’s Kollsnes gas plant had been resolved, restoring full exports via the Langeled pipeline between Norway and Britain.

“We see Langeled back up but much lower LNG sendout, I think they are running empty,” said the trader.

Speculation about supply also contributed in Friday’s price volatility, another trader said.

“You can just buy it all day long and hold and take the profits later in the day,” the second trader said.

Despite the supply shortfall, no liquefied natural gas vessels were scheduled to arrive in Britain on Friday, port authority and Thomson Reuters data showed. The first one, the Maran Gas Ulysses, is scheduled for March 6.

Editing by Gwladys Fouche/Jason Neely/Alexander Smith

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