Gas pipeline maintenance drives prices up
Gas prices continued to go up on Wednesday, amid unplanned maintenance and bullish moves on the carbon market.
Gas prices Contracts across the curve pushed higher as the session progressed, with both the front-month and front-season contracts breaking out to test the 65p/therm psychological level, before retreating back to close circa 0.07p/kWh below their previous settlements.
Capacity restrictions in both the UK and Norway may be the prime reason for increases to contracts at the front-end; according to data from National Gas, 6mcm/day was being taken offline at Barrow (North Terminal) due to a technical process issue, this coincided with reduced capacity totaling 12mcm/day at Norway’s Skarv field, limiting exports to the UK and EU (data from offshore operator Gassco).
Contracts further out may have been influenced by sharp gains observed on the carbon market, according to data from ICE the Carbon EUA benchmark contract closed at just under €58/tonne, underlining an almost 11% increase in the contracts value since 23rd February.
In other news, the UK T-4 power auctions for 2027-28 concluded on 27th February. The auctions concluded with a clearing price of £65/kW/year, beating the record set last year and highlighting an increased role of gas-for-power in the UK’s power generation mix.
Natural gas prices have opened very much in line this morning, with the Summer 24 front-season contract currently being offered circa 0.02p/kWh below its previous settlement, although many contracts have yet to trade at time of writing.
In terms of UK’s current electricity demand, if we check the latest half hourly period at the time of writing (16:30 – 17:00), electricity demand is currently 36.42 GW’s in the UK.
In terms of the generation mix, gas is currently the biggest contributor at 14.92 GW’s (38.59%). Wind power is a close second generating 9.73 GW’s (25.16%) of the UK’s total electricity.
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