Home Heating
Gasoil for delivery in February fell 3% this month to $916 a metric ton on ICE Futures Europe as of 4:34 p.m. London time. Germany is the largest European market for the home-heating fuel.
Meteorologists at MetraWeather, MeteoGroup U.K., MDA, WSI Corp. and DWD predicted warmer-than-normal weather in most of Europe next month. The U.K. will be cold, wet and windy next month, according to the Exeter, England-based Met Office. SMHI, a Swedish forecaster, sees a cold start to February for Scandinavia and northwest Europe, followed by wetter and milder weather from the second week.
Average temperatures across northwest Europe and the U.K. were 1.2 degrees Celsius (2.4 Fahrenheit) above the norm in December and 2.2 Celsius above average in January, according to WSI data on Bloomberg. The region will be 2.1 Celsius warmer than average in February’s first 15 days, the model showed.
Gas demand in the U.K. in January was 10% below the seasonal average of 306 million cubic meters a day, according to National Grid data compiled by Bloomberg. The volume of gas in storage in Europe narrowed its deficit to the 2009-13 average to 2.8 points on Jan. 16 from 4.7 percentage points on Dec. 31, according to data compiled by Bloomberg.
Trading Hub
“Prices do seem very bearish” for U.K. gas through this quarter, Trevor Sikorski, head of natural gas, coal and carbon at consultant Energy Aspects Ltd. in London, said in a Jan. 27 research note.
Gasoil inventories held in independent storage at the Amsterdam-Rotterdam-Antwerp trading hub surged to 1.95 million tons in the week to Jan. 16, the most in more than two months, according to data from PJK International BV, a researcher based in Breda, Netherlands.
Supplies of heating oil are ample as mild weather limits demand, Harry Tchilinguirian, head of commodity markets strategy at BNP Paribas SA in London, said on Jan. 28.
Output from German wind farms averaged 8,256 megawatts amid stormy weather in January, compared with the 12-month average of 5,563 megawatts, according to data from the Leipzig-based European Energy Exchange AG compiled by Bloomberg.
Record Wind
German wind power output is forecast to rise to a record 33,126 megawatts on Feb. 10, according to Bloomberg’s European weather model. The current record is 26,269 megawatts on Dec. 5, according to EEX data.
In the U.K., wind power output rose to a record 6,222 megawatts today, and was 55% above the one-year average of 2,242 megawatts across the whole month, National Grid data on Bloomberg show.
U.K. wind generation is forecast to average 4,409 megawatts through Feb. 14, Bloomberg’s model shows. In Germany, average wind power through Feb. 14 output is seen at 11,945 megawatts.
“Wind speeds will remain above normal across northern parts of Germany and France, with periods of particularly windy conditions at times during the week through Feb. 16,” Byron Drew, lead forecaster at MetraWeather, said in an e-mailed report today.
Copyright 2014 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.