Above average demand drives up prices

An upward correction was observed at the NBP on Tuesday as forecasts of above-average demand extend further into January.

An unplanned outage at Norway’s Skarv field removed 4.6mcm across the gas-day due to process problems, with elevated demand across Europe perhaps amplifying the incident.

LNG is currently serving as a vital component of the GB supply mix; with disruptions to Norwegian and UK supply, as well as periods of heightened demand, being offset by the super-chilled fuel.

The BBL interconnector has switched to its forward flow configuration this morning, facilitating pipeline flows from the Netherlands to the UK market which should also help to reinforce supply flexibility.

Small gains also posted across the baseload power curve. Well above average demand in France is serving to tighten regional supplies by restricting exports from the country’s large nuclear fleet, which is a crucial instrument for keeping the power grids of neighbouring countries balanced, especially at times of fluctuating renewable generation.

Crude oil prices eased off slightly yesterday following geopolitical instability after the arrest of Venezuelan President Maduro over the weekend, but carbon price remains firm, feeding support into the curve.

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Price commentary courtesy of Crown Gas and Power