Warm weather helps drive down demand

Gas prices lost value for a third consecutive day on Friday, amid downward revisions to demand models and consistently high European storage levels.

Considerable losses were posted across the curve, with both the front-month and front-season contracts shedding circa 0.085p/kWh when compared to their previous settlements.

According to our latest 14-day demand forecast, British gas demand is set to outturn significantly below seasonal norms until at least 22nd February, helping to ease demand and potentially capping storage withdrawals across the same period.

Additionally, data from Gas Infrastructure Europe shows that European stocks are currently 67.02% full, very much in line with the 66.99% recorded for the same date last year.

Furthermore, EU storage levels continue to outperform the 5-year moving average by 11 percentage points, reinforcing confidence in Europe’s ability to cope without Russian pipeline flows via the decommissioned Nord Stream route.

In other news, data from offshore operator Gassco shows that the unplanned outage that had lasted 5 days at Norway’s Troll field finally came to an end on Friday morning, adding an additional 10.8mcm/d to Norwegian export capacity.

Natural gas prices have so far continued their downwards trajectory this morning, with the Summer 24 front-season contract currently being offered circa 0.05p/kWh below its 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 is currently 39.11 GW’s in the UK.

29.48% (11.92 GW’s) of the UK’s total electricity is being generated from wind turbines at the moment, with gas having to contribute slightly more at 14.47 GW’s (35.798%).

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