Market softens as wind output helps reduce gas demand
Day ahead gas prices moved down on Tuesday as wind output increased.
Contract prices across the curve fell steadily throughout the session and resulted in near-curve contracts shedding circa 0.24p/kWh when compared to their previous close.
Pressure to prices at the front-end potentially came from windier conditions which subsequently helped curb demand. According to data from National Gas, wind-generated power increased for a second consecutive session on Tuesday, rising by 20% day-on-day.
Additionally, actual gas demand was around 24mcm/day below seasonal norms on average throughout the session.
Contracts further out seemingly mirrored moves across the carbon market, data from ICE showing the EUA benchmark contract shed circa 2% day-on-day.
Gas prices have opened firm this morning with the December-23 front month contract last trading circa 0.1p/kWh above its previous close at time of writing.
If we check the latest half hourly period at the time of writing (10:00 – 10.30), 37.78% (15.26 GW’s) of the UK’s total electricity (38.99 GW’s) is being generated from wind turbines at the moment with gas a close second contributing 13.30 GW’s (32.92%) of the total generation mix.
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