Gas prices pressured over fears of falling LNG imports from US
Day ahead gas prices were divided on Monday with high wind output helping prompt prices but concerns over US LNG supply pressured contracts further out.
Strong winds swept across the UK due to Storm Debi which subsequently bolstered wind power generation; according to data from National Grid wind turbine generation surged by around 79% when compared to Fridays gas-day, subduing gas-fired power demand over the same period.
Contracts further out may have found support from news of falling Feedgas flows at the Freeport LNG plant in Texas. Reports emerged in the afternoon that flows via the Gulf South Pipeline (which supplies the facility) had unexpectedly dropped by 54%, stoking fears of another possible disruption to US LNG exports.
In positive news, US energy giant Chevron confirmed the resumption of supply from the Tamar field in Israel, the news comes after operations at the field were suspended on 09/10/2023 due to escalating conflict in the region.
Gas prices have opened in negative territory this morning, with the December 23 front-month contract currently being offered 0.14p/kWh below its previous settlement, at time of writing.
If we check the latest half hourly period at the time of writing (09:00 – 09.30), wind conditions have eased which sadly means that we have become more reliant on gas for power today. Only 30.6% (11.84 GW’s) of the UK’s total electricity total demand (37.04 GW’s) is being generated by wind turbines this morning with gas playing a much bigger part than yesterday at 34.17% (13.22 GW’s).
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