Lack of LNG increases wholesale prices
NBP gas prices rebounded on Friday, driven by sparse LNG and the potential for US-China trade talks.
On the LNG front, the latest shipping signals suggest that only two vessels are expected at British terminals over the next fortnight, suggesting that deliveries may be losing pace with the same time last year amid strengthening demand across Asian markets.
Additional support may have emerged from comments from China’s Commerce Ministry on Friday that it was “currently evaluating” the possibility for trade talks with the United States, potentially prompting some to heighten fossil fuel demand expectations.
Power prices too saw increases as muted wind generation kept gas-fired power generation elevated.
According to data from National Grid, CCGT demand averaged 7.8GW across Friday, a slight decrease from 9.7GW the day prior but still accounting for 26.6% of the British power mix.
In other news, the European Union is expected to publish plans later today that will outline a roadmap to phase out Russian fossil fuels by the end of 2027. Greater domestic production, accelerated renewable roll-out, alternative pipeline and LNG supplies are all potential components of the blocs long-awaited plans to ditch Russian natural gas imports following the 2022 Russian invasion of Ukraine and the destruction of the major Nord Stream pipeline just months later.
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Price commentary courtesy of Crown Gas and Power 