British wholesale gas prices soared to fresh more than two-year highs on Tuesday as colder weather stoked demand and rocketing Asian liquefied natural gas (LNG) prices curbed supply to Europe.
* The within-day contract was up 5.00 pence at 72.00 pence per therm by 0937 GMT, its highest level since October 2018.
* The day-ahead contract was up 3.80 p at 71.00 p/therm.
* Traders said temperatures were forecast to go lower and soaring prices of LNG had lifted gas prices across Europe.
* Asian LNG prices have rocketed over the last few weeks as cold weather grips the region, hitting record highs.
* As a result, fewer tankers are arriving in Europe.
* The Boris Davydov LNG tanker is docked at Britain’s Isle of Grain terminal, but no other LNG tankers are scheduled to arrive over the next few weeks.
* Meanwhile colder temperatures in Europe are also pushing up demand.
* "Sudden stratospheric warming is bringing cold arctic air flows into Europe as well, which has led to a surge in power demand,” analysts at Barclays said in a research note
* “This lowered the previously robust storage level to a seasonal level and sent the European natural gas prices to a two-year high,” Barclays analysts said.
* Average temperatures in Britain were forecast at 5.3 degrees Celsius for Tuesday, falling to 3.5 C on Wednesday Refintiv Eikon data showed.
* The forecasts were 0.7C and 2C respectively lower than previous expectations.
* The February contract was up 5.25 p at 72.50 p/therm, the highest price for the font month contract since November 2018.
* The day-ahead gas price at the Dutch TTF hub was up 1.65 euro at 23.95 per megawatt hour.
(Reporting By Susanna Twidale; editing by Nina Chestney) ((susanna.twidale@thomsonreuters.com; +44 207 5424753;))
