Gas prices reduce after forecast drop in demand
NBP gas prices corrected lower after demand forecasts eased on Friday.
ICE data shows that the Summer 26 front-season contract dived 3.2p/therm (0.11p/kWh), pulling back from the highest levels seen so far this year despite heightened geopolitical tensions between the US and Iran.
The latest Crown Gas and Power 14-day model shows that demand is expected to average below seasonal norms until at least 8th March, coinciding with reports of higher temperatures across Northwest Europe.
Iranian military drills in the critical Strait of Hormuz supply route have stoked fears that oil and gas shipments to the global market could be disrupted and the US has deployed another large aircraft carrier to the region, marking the largest build up in the Middle East since the Iraq war in 2003.
A recovery in renewable generation helped to guide the baseload power curve lower on Friday.
Elexon data shows that wind power eclipsed gas to become the largest component of the GB mix, averaging at a rate of 17.2GW (44.6%) with total renewables (wind, solar, hydro, biomass) reaching 20.8GW (53.9%).
Carbon prices firmed on Friday, this may have served as a price floor that prevented further downside, but they continue to hold well-below the price levels we saw in January.
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Price commentary courtesy of Crown Gas and Power 