Forecast of lower demand for next 2 weeks helps reduce prices

Forecasts of unseasonably low demand and robust LNG supply combined to reduce gas prices at the NBP near-curve on Tuesday.

According to the latest run of our 14-day model, demand is expected to hold comfortably below seasonal norms until at least 10th March.

This, along with above average temperature forecasts for much of Europe over the same period, should help to keep storage withdrawals muted, and these have already seen a significant decline over the past few days, directly addressing a central market concern and eroding risk premiums.

Norwegian flows to the UK are holding fairly steady, totalling 55.4mcm yesterday, though this is lower than the same date last year (63.6mcm).

UK power prices saw small losses despite a moderate drop in wind power, as the baseload curve largely tracked weakness across the wider energy complex.

NBP gas, Brent Crude and Carbon EUA benchmarks each posted small losses by yesterdays close.

Wind still managed to narrowly outpace gas on Tuesday, serving as the largest source of generation, though some variability in renewables is forecast across the rest of the week which could support system balancing costs and demand for interconnector imports.

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Price commentary courtesy of Crown Gas and Power