Gas prices ease amid strong supply
Day ahead gas prices changed direction on Friday amid strong LNG supply and steady Norwegian flows.
The biggest moves were posted on the December 23 front-month contract, which shed 0.24p/kWh when compared to its previous close.
A multitude of incoming LNG cargoes likely added weight to contracts across the near-curve; the latest shipping signals indicate that as many as 7 laden vessels are on course to arrive at UK terminals over the next 2 weeks. Furthermore, data from National Gas shows that LNG send out averaged 64mcm/d across Friday’s session, an increase of 20% day-on-day.
Further reductions came from plentiful Norwegian supply, data from offshore operator Gassco shows that Norway-UK pipeline exports were nominated at 73.3mcm across the gas-day which was enough to meet almost 30% of forecasted demand.
In other news, an increasing amount of LNG operators are deciding to route vessels on a 2 week longer route to avoid using the Panama Canal in Central America. This comes amid low water levels which have prompted authorities to limit the number of vessels traveling through the narrow waterways.
Key contracts have continued to lose value at the NBP this morning, with the Summer 24 front-season contract currently being offered circa 0.1p/kWh below its previous settlement at time of writing.
If we check the latest half hourly period at the time of writing (09:30 – 10.00), a massive 50.96% (20.66 GW’s) of the UK’s total electricity demand (39.75 GW’s) is being generated by wind turbines this morning with gas playing a much smaller part at 17.61% (7.14 GW’s). This will really help ease the pressure on gas for power demand.
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