According to the Wise News Finance APP, the United Kingdom natural gas futures price has exceeded the European mainland benchmark contract, indicating that traders are beginning to prepare for rising demand. In recent days, the November delivery United Kingdom natural gas contract is about 2% higher than the most liquid Europe's Netherlands natural gas futures contract, a higher percentage than the same period last year.

In the summer, the United Kingdom natural gas futures price is usually lower than Dutch natural gas futures, but in winter, it may increase above this European benchmark to attract additional supply. This year, the escalated tension in the Middle East and concerns about the risk of liquefied natural gas supply from the main exporting country Qatar have exacerbated this trend.

As of the time of publication, the European natural gas benchmark Netherlands prompt futures price fell by 0.4% to 38.77 euros per megawatt-hour. The United Kingdom equivalent contract fell by 0.4% to 96.79 pence/therm, or approximately 39.30 euros per megawatt-hour.

Since the energy supply from the Middle East has not been interrupted so far, both of these futures contracts have erased last week's gains, but traders remain highly vigilant about further developments.

Unlike major European Union countries, the United Kingdom lacks winter storage capacity. Compared to Germany's 89 days, the UK's facilities can only meet demand for less than 8 days during peak cold periods. Therefore, the country often exports spare natural gas to the EU in the summer and imports fuel through two pipelines connecting the Netherlands and Belgium in the winter.

Nick Campbell, Managing Director of Inspired Plc, said: "A prolonged cold snap could quickly deplete the UK's natural gas storage facilities, hence the need for premium pricing compared to continental Europe."

S&P Global natural gas market analyst Elizabeth Kunle stated that another driving factor for the premium of United Kingdom natural gas futures is the need to attract more LNG after a decrease in LNG imports earlier this year. She said ships carrying super-chilled fuel"prefer ports in northwest Europe and Italy, rather than the United Kingdom".

According to Bloomberg compiled ship tracking data, the shipment volume of liquefied natural gas (LNG) heading to the United Kingdom from January to September decreased by more than half compared to the 2023 level. The EU increased its import capacity for liquefied natural gas, reducing the demand for supply from the United Kingdom, while the domestic natural gas consumption of the United Kingdom electrical utilities industry also decreased significantly.

However, according to Kunle, unless there is a weather change, the current premium may be temporary. She stated that considering the "considerable strength" of the domestic supply in the United Kingdom, the United Kingdom may still be a net exporter of natural gas in November.