Prices continue to soften as demand eases

NBP gas prices continued to soften on Monday as Norwegian supply resumed and demand eased back to below seasonal norms.

The conclusion of an unplanned outage at Norway’s Troll field restored 8mcm/d of capacity, contributing to a further 15.1% increase in Norway-GB flow nominations.

Domestic production fell slightly amid an ongoing technical process issue that removed 6mcm/d at the Barrow gas treatment plant.

According to the latest run of our 14-day model, demand is expected to average slightly below seasonal norms until at least 4th August which may give British storage reserves some much needed respite, so long as there are no additional supply side disruptions.

Baseload power prices continued to decline in tandem with natural gas, likely driven by sustained high levels of gas-fired generation, highlighting the strong interdependence between the two fuels in recent sessions.

Though forecasts from Elexon suggest a notable increase in wind generation next week; system demand is also expected to rise, which may continue to support elevated levels of gas power generation even still.

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Price commentary courtesy of Crown Gas and Power