Gas prices continue to go up amid UK capacity restrictions

Gas prices continued to increase on Monday amid British capacity restrictions and a bullish wider energy complex.

The biggest moves were once again observed at the front-end, with the June-24 contract surging just under 0.1p/kWh above its previous close.

Unplanned maintenance at a key UK gas facility didn’t help the situation. According to data from National Gas an unplanned outage at the Barrow (North Terminal) removed supply at a rate of 6mcm/day across Mondays gas-day, although it has been dismissed as of this morning.

Contracts further out also increased driven by a rising carbon and coal prices; according to data from ICE the EUA benchmark contract saw an increase of 3% day-on-day while the Rotterdam Coal benchmark also observed considerable gains of almost 3.5% across the same period, likely on the back of fresh US sanctions on Russian coal.

In other news, European energy ministers reached a political agreement on Monday to extend their voluntary gas reduction agreement until 2025. The arrangement was initially put in place in response to the energy crisis as a countermeasure to improve energy security across the member states.

This morning gas prices have continued to climb upwards, with the Winter-24 contract last trading over 0.1p/kWh above its previous settlement.

In terms of UK’s current electricity demand, if we check the latest half hourly period at the time of writing (09:30 – 10:00), electricity demand is currently 37.16 GW’s in the UK.

In terms of the generation mix, gas is currently generating 15.53 GW’s (40.13%) of the UK’s electricity. Wind power is generating 8.12 GW’s (20.97%) of the UK’s total electricity this morning.

If you want to see more information on the wholesale market trends subscribe to our weekly report here.