Strong supply fundamentals provides confidence as cold snap continues to bite

Despite the current cold snap, wholesale gas prices went down on Monday, helped by strong supply fundamentals.

All curve contracts posted losses when compared to their previous settlement, with the February-24 front-month contract posting some of larges moves of the session, shedding a huge 0.29p/kWh when compared to its previous settlement.

A surge in LNG send-out likely served as a prime source of pressure. According to data from National Gas, send-out increased by a substantial 130% day-on-day.

Furthermore, the latest shipping signals indicate that as many as 12 laden vessels are on course to arrive on British shores by the 21st January.

Further pressure perhaps came from strong Norwegian flows into the Easington and St Fergus terminals.

Data from offshore operator Gassco shows that nominations increased by circa 6% when compared to the previous gas day.

Gas prices opened in negative territory in early trade this morning, although prices are now heading back towards previous settlement at time of writing.

If we check the latest half hourly period at the time of writing (09:30 – 10:00), electricity demand has increased again to 47.06 GW’s in the UK.

Over 45% of the UK’s power is being generated from gas at the moment.

Specifically, 45.83% (21.68 GW’s) of the UK’s total electricity is being generated from gas currently with wind turbines the second biggest contributor at 14.65 GW’s (30.97%).

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