Prices ease off slightly amid low demand forecast
NBP gas prices continued to fluctuate within a narrow range on Wednesday, this time opting to ease a little amid consistently low demand and limited optimism ahead of Russia-Ukraine talks.
According to data from National Gas, system demand was forecast to total 153.5mcm as of 15:00 (BST), a figure 20.7mcm below the seasonal norm. Furthermore, the latest run of our 14-day model indicates that demand will continue to average comfortably below average until at least 28th May, supporting storage injections and/or exports to the EU.
A gradual increase in renewable and nuclear power across this week likely enhanced bearish sentiment yesterday, with the share of wind and solar each rising to meet 37.2% of GB power demand, pushing down more expensive gas-fired generation to just 17.5% of the power mix (data from National Grid).
The market has seen some volatile price action this morning after the viability of talks scheduled to take place in Turkey today has come into doubt. The Kremlin has confirmed that President Putin will not be attending peace talks, and Ukraine’s President Zelensky had previously affirmed that he would only speak to Putin himself.
This morning, the timings of any such talks are unclear, Moscow has indicated that talks will proceed this afternoon, but Kyiv has suggested they are scheduled for tomorrow.
Nonetheless, President Zelensky is set to meet with Turkish President Erdogan later today, stating (at the time of writing) that he will decide how to proceed after this meeting.
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Price commentary courtesy of Crown Gas and Power 