FX.co ★ UK Natural Gas Futures Fall to 6-Week Low

UK natural gas futures have dipped to just under 79 pence per therm, marking the lowest level since mid-September. This decline comes amid predictions of milder weather, suggesting reduced heating demand, while supply conditions remain stable. Although the week began with cooler temperatures, the Met Office anticipates a steady increase, with highs expected to return to the low-to-mid teens Celsius in much of the UK. In the southeast, temperatures could climb to approximately 15°C by Friday and Saturday. This prospect of warmer weather is likely to alleviate the pressure on gas consumption. Concurrently, European gas storage is close to 83% capacity, mitigating the competition for LNG cargoes. Robust LNG deliveries and consistent flows from Norwegian pipelines continue to offset the reduction in Russian gas supplies, while decreased demand from China has made additional supplies available for Europe. Further strengthening supply, Shell has commenced production at its Victory gas field in the North Sea, which is anticipated to yield approximately 150 million cubic feet of gas daily.