Warm temperatures offset potential prices increases
It was another day of lateral movement to gas prices on Wednesday amid unplanned Norwegian outages and subdued gas demand.
Contracts across the curve continued to trade within a narrow range of their previous settlements with many posting gains of less than 0.017p/kWh when compared to their previous close.
Unscheduled maintenance at Norway’s Aasta Hansteen and Kårstø facilities likely provided support to near-dated contracts.
According to offshore operator Gassco, the unplanned works which commenced yesterday combined to reduce available volumes at a rate of 35mcm/day throughout the session, although the outage at Aasta Hansteen has now been resolved.
On the other hand, continuous low gas demand likely limited any considerable gains being made. Data from National Gas shows that actual demand has remained below seasonal averages for the twenty-third consecutive session and sat over 73.5mcm/day below seasonal norms on Wednesday.
This morning gas prices have retreated into bearish territory, with the Winter-24 contract last offered circa 0.12p/kWh less than its previous closing price, however many contracts are yet to trade at time of writing.
In terms of electricity demand, if we check the latest half hourly period at the time of writing (08:30 – 09:00), electricity demand is currently 35.00 GW’s in the UK.
It’s still quite windy today! 34.11% (12.65 GW’s) of the UK’s total electricity is being generated from wind turbines at the moment, with gas being used to generate only 9.37 GW’s (25.26%) of electricity currently.
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