Gas prices head up as temperatures drop
Day ahead gas prices edged higher on Tuesday amid Norwegian capacity restrictions and rising British demand.
The biggest moves were once again posted day ahead price, with the Weekend contract surging 0.44p/kWh above its previous close, amid tightening supply fundamentals.
According to data from offshore operator Gassco, unplanned outages at the Oseberg and Gullfaks fields combined to remove 23mcm across the gas-day, squeezing Norwegian export capacity over the same period.
A moderately undersupplied British system likely offered support to near-dated contracts. Data from National Gas shows that the British system was circa 5mcm short throughout the session, at the same time total demand was forecast to rise by around 11% when compared to the previous gas-day.
Reassuring news concerning the US Freeport LNG terminal likely muted increases further out where the gains were much smaller. The Texas based LNG facility confirmed that it was on track to return to normal output following a total shutdown on Monday, after an issue with the plants incoming power feed was resolved, squashing fears of another potential US LNG drought.
Natural gas prices continue their upwards trajectory this morning, with the Summer 24 front-season contract currently being offered 0.07p/kWh above its previous settlement at time of writing.
If we check the latest half hourly period at the time of writing (12:00 – 12.30), we have become slightly less reliant on gas for power today as the wind has picked up. 34.60% (14.09 GW’s) of the UK’s total electricity total demand (40.15 GW’s) is being generated by wind turbines at the moment with gas playing a smaller part than yesterday at 30.86% (12.57 GW’s).
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