Bloomberg: Ukraine Widening U.K. Gas Spread Set to Boost Inventories
European natural gas injections may accelerate as warmer-than-usual weather and fears of disruptions via Ukraine make it more profitable to store the heating fuel, according to analysts.
The premium of gas for the six months from October to the next-day contract in the U.K., Europe’s biggest market, has risen to the widest since June and has been above 10 pence a therm ($16.84 a million British thermal units) since March 31, according to broker data compiled by Bloomberg. Injections become attractive above that level, according to Patrick Heather, a senior research fellow at the Oxford Institute of Energy Studies.
Milder-than-normal weather has weakened next-day gas prices about 5 percent this month to the lowest level for this time of year since 2010. The winter contract rose about 4 percent amid concern that supplies via Ukraine, which transits about 15 percent of the European Union’s gas demand, may be affected because of its dispute with Russia.