Gas prices go up as the temperature drops
A combination of cooler weather and increased demand meant an increase to gas prices on Monday.
Key contracts across the curve posted gains with the largest moves of the session seen at the front-end; the March-24 front-month contract saw upside of almost 0.07p/kWh when compared to its previous settlement.
An increase in heating related gas demand provided the prime reason for increases to near-dated contract prices. According to data from National Gas actual demand saw an increase of over 21mcm/day when compared to the previous gas day and reached to just 6mcm under seasonal averages.
Furthermore, additional data from National Grid shows that CCGT (Combined-Cycle Gas Turbine) demand saw a day-on-day increase of 27%, diverting supplies from the British gas system.
In other news, state-run QatarEnergy has announced expansions to their already ongoing LNG projects with the prospect of increasing exporting capabilities by 85% by 2030.
This morning gas prices have opened in bearish territory at the NBP with the Winter-24 contract last offered circa 0.03p/therm below its previous closing price.
In terms of electricity demand, if we check the latest half hourly period at the time of writing (12:00 – 12:30), electricity demand is currently 41.34 GW’s in the UK.
In terms of the generation mix, gas is currently the biggest contributor at 14.06 GW’s (33.57%). Wind power is a close second generating 13.84 GW’s (33.05%) of the UK’s total electricity.
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