People turning up the heating to cope with freezing temperatures sent the gas market into a spin yesterday.
Trading prices for gas spiked by 7 per cent to 63.5p a therm and the amount in storage tumbled to a five-year low, prompting speculation from traders that Britain might have problems if the cold snap was prolonged.
When the cold snap began to bite a fortnight ago wholesale traders started withdrawing gas from Britain's only long-range storage facility, Rough, and supplies have sunk to 17 per cent below levels this time last year.
The Met Office forecasts that bitterly cold weather will continue in the north this month, keeping up pressure on storage to top-up supplies coming in from the North Sea and liquefied natural gas terminals. Jason Durden, energy trader at Energy Quote JHA, said: "If you do the numbers, storage will be empty some time in early February, if it stays this cold."
Britain's historically abundant North Sea supplies have dwindled to about 40 per cent of the UK's use, leaving the country more dependent on pipeline imports from Norway, the Netherlands and, to a lesser extent, Russia. Liquefied natural gas from Qatar and Algeria is shipped to ports.
Yesterday, demand reached 454 million cubic metres, 30 per cent higher than 1 December last year, while storage fell to 3.5 billion cubic metres, just over a week's supply.
Asked if the UK could run out of gas, Edward Cox, a gas analyst at ICIS Heren, said: "I don't see any prospect of that because we have so many various sources of supply."