Lower wind generation drives prices up

Lower wind output and bullish carbon futures helped to drive up gas prices at the NBP on Friday.

Modest gains of circa 2p/therm (0.07p/kWh) were posted at the front-end as short term supply disruption jolted an otherwise settled market.

A marked drop in wind generation may have played into the bullish sentiment. According to data from National Grid, wind turbine generation fell by around 39% between Thursday and Friday which subsequently elevated gas-fired power generation across the same period.

Contracts further out found limited help as the carbon market increased with data from ICE showing that the Carbon EUA benchmark contract surged by circa 1.6% day-on-day.

In other news, the Freeport LNG terminal on the US East Coast had reportedly returned to full operating capacity as of Sunday. The terminal is the second largest of its kind in the US and is instrumental to securing Europe’s supplies of LNG (Liquefied Natural Gas) so this news will come as some relief to European gas hubs.

This morning, despite yesterday’s news, prices have so far continued their upward trajectory with the Winter 24 front-season contract currently being offered circa 2.3p/therm (0.08p/kWh) above its previous settlement at time of writing.

If you want to see more information on the wholesale market trends subscribe to our weekly report here.

Price commentary courtesy of Crown Gas and Power Power report courtesy of Crown Gas and Power

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