Gas Traders Bearish Third Week as U.K. White Christmas Unlikely

European natural gas traders are bearish on U.K. prices for a third week, with warmer-than-usual weather meaning most of the country will probably have a fourth Christmas without snow.

Eight of 14 traders, brokers and analysts surveyed expect month-ahead gas in the U.K., Europe’s biggest market, to fall next week, three were bullish and three were neutral. Snow isn’t forecast for most of the U.K. next week, according to MetraWeather (U.K.) Ltd.

Temperatures will be 5 to 6 degrees Celsius (9 to 11 Fahrenheit) above average in the week’s first two days, dropping to normal levels on Christmas day, said a forecaster at MetraWeather. The U.K. will receive double the amount of LNG cargoes this month from a year earlier, port authority and ship-tracking data compiled by Bloomberg showed.

“Near-curve prices will soften next week as demand is indeed traditionally lower due to the Christmas season,” a senior analyst said by e-mail yesterday. “Liquidity is also low as traders wind down for the holidays.”

U.K. gas for next-month delivery fell 24 percent over the past year as parts of England are headed for the mildest year since records began in 1659. Snow fell on Christmas day 38 times in the past 52 years, with 83 percent of weather stations registering snow on the ground in 2010, the highest ever, according to the Met Office. Snow also fell on Christmas 2009.

U.K. front-month gas weakened 0.7 percent to 53.76 pence a therm ($8.42 a million British thermal units) by 8 a.m. London time on the ICE Futures Europe exchange, taking its weekly loss to 1.3 percent. Dutch gas declined 0.9 percent to 22.40 euros a megawatt-hour, for a weekly drop of 1.7 percent, according to broker data compile by Bloomberg.

LNG Tankers

An LNG cargo from Trinidad & Tobago was due to arrive at the U.K.’s Dragon terminal today and another is scheduled at the Isle of Grain on Dec. 21. That will take the total number of shipments in December to four, compared with two last year.

“The oversupplied intraday market will weigh on prompt contracts next week, South Hook, Dragon and Isle of Grain all have cargoes en route over the next 10 days, adding further bearish sentiment.”

U.K. temperatures will fall to about 2 degrees below normal by next weekend, with Christmas day being the turning point, temperatures will fall to as low as 2.9 degrees Celsius on Christmas day, according to CustomWeather data.

Traders were also bearish Dutch gas for a third week, with the same number of participants being bullish, bearish and neutral, according to the Bloomberg News survey.