Good storage levels and strengthening Norwegian flows further reduce prices
Strengthening Norwegian flows further reduced gas prices at the NBP on Monday.
Contracts for winter delivery saw the most pronounced losses, as supply side risks began to dissipate.
Data from offshore operator Gassco shows that Norwegian pipeline exports to Great Britain increased significantly over the weekend but are yet to return to full capacity due to unplanned works at the Troll, Skarv and Oseberg fields which combined to remove 54.8mcm/d of overall export capacity to Europe – this has halved to 26.5mcm/d as of this morning.
On the storage front, if trends continue, levels in continental Europe are set to reach 83% just ahead of the target period of 1st October to 1st December.
Weakness across the wider energy complex helped to guide UK power prices lower on Monday.
Modest losses were posted on the European benchmarks for natural gas, carbon and coal, helping to offset a sharp decline in British renewable power following the exceptionally high levels of wind generation observed across much of last week.
Bearish natural gas market supply fundamentals – higher Norwegian flows and plentiful storage – have likely served as a prime driver due to the fuel’s critical role in power generation across Great Britain and the wider region, especially when renewables are lower.
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Price commentary courtesy of Crown Gas and Power 