Gas prices wrestle for clear direction
Gas price wrestled for a clear direction on Friday as higher wind and improved LNG supply contended with prolonged British maintenance and a shifting demand outlook.
Small moves of no more than 0.75p/therm (0.026p/kWh) were posted in each direction as contracts continued to trade within the narrow range established over the past few weeks.
Strengthening wind output likely served as a key source of pressure at the front-end by helping to offset an anticipated increase in overall gas demand. According to data from National Grid, wind-power output averaged circa 12GW on Friday, this is well above average for that date and helped to slash gas-for-power demand in half [4.4GW] when compared to Wednesdays gas day [9.3GW].
A moderate uptick in LNG supply after an enduring lull in cargoes perhaps helped to increase confidence in British supplies, data collated from National Gas shows that LNG send out reached at least 13mcm by midday, this is the highest (within session) value that we have recorded since 24th May.
It wasn’t all smooth sailing however, with technical process issues at the UK’s Barrow North terminal and Cygnus field removing 9.77mcm of supply across the gas-day (data from GB REMIT).
Furthermore, the latest run of our 14-day model shows that demand rose to above seasonal norms over the weekend and is expected to remain elevated above average until at least 24th July, coinciding with reports of cooler temperatures over the next couple of weeks.
This morning, gas prices have edged up slightly, with the Winter 24 front-season contract currently being offered circa 2p/therm (0.07p/kWh) above its previous settlement, although many contracts have yet to trade at time of writing.
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