Wholesale gas prices reduce amid robust supply fundamentals
Gas prices continued there downward trend at the NBP on Wednesday as bearish supply fundamentals continued to prevail despite a lackluster LNG outlook.
Both the front-month and front-season contracts were holding at the lowest levels seen since May, with each hovering just north of key psychological levels.
Robust, uninterrupted flows from Norway over the past few weeks has likely helped to reinforce confidence in UK supplies following severe supply disruptions that arose in late May. Data from Norway’s Gassco AG shows that 65.2mcm was nominated for delivery into Britain’s Easington and St Fergus terminals, helping to meet around 40% of actual demand.
On the LNG front, send out remains subdued on the back of a quiet delivery schedule. The latest shipping signals show that only 1 vessel is set to arrive over the next 7 days, accounting for just 5% of UK supply.
In other news, Bulgarian state operator Bulgargaz is reportedly seeking €400 million in compensation from Russia’s Gazprom following undelivered volumes, with this latest legal contest coming after Germany’s Uniper was awarded $14 billion in an arbitration ruling against Gazprom in June.
This morning, although natural gas prices had initially opened at similar levels when compared to yesterdays close, most have now traded circa 1p/therm (0.034p/kWh) above their previous settlement at time of writing.
If you want to see more information on the wholesale market trends subscribe to our weekly report here.