Prices correct higher so that UK can compete for expensive LNG cargos

Gas prices corrected higher on Tuesday after losing downward momentum and failing to break below 74p/therm.

While an overall healthy supply picture is helping, a need to continue attracting expensive spot LNG cargoes is likely serving as a price floor for the market in the run up to peak winter months.

Norwegian exports via Easington and St Fergus totalled 75mcm, the highest since 27th September, buoyed by increased capacity at the Kollsnes processing facility which boosted exports by 6mcm/d.

Market participants continue to monitor events in Ukraine closely, who is increasingly reliant on EU imports after a ramp up in targeted Russian strikes on vital energy infrastructure.

The baseload power curve also posted gains, albeit slightly softer when compared to the NBP.

A sharp decline in gas-fired generation amid higher wind may have helped by slightly decoupling the two markets.

A bullish wider energy complex served as a key source of support. According to data from ICE, the Brent Crude and Carbon EUA benchmark contracts rose by an additional 1.7% and 0.9%, respectively, offering additional support to the curve.

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Price commentary courtesy of Crown Gas and Power