Wholesale prices ease amid softening demand outlook
NBP gas prices eased slightly on Wednesday amid muted gas-for-power demand and a softening demand outlook.
The latest run of our 14-day model indicates that demand will fall below seasonal norms from 11th June, remaining below average until at least 18th June, helping to stave off supply-side risks expected over the same period.
The next round of large-scale maintenance has now commenced over in Europe’s largest supplier Norway.
From today, several assets including the Kollsnes and Kårstø processing facilities alongside the major Troll field will see reduced output due to planned works. At least 60mcm/d of export capacity will be removed until 18th June, with a scheduled peak of 97.5mcm/d on Monday 16th.
Consistently strong renewable power generation has supressed gas-fired generation over the past few sessions.
National Grid data shows that yesterday, 53% of the GB power mix came from renewable sources, keeping gas (CCGT) generation at a relatively low 20.7% With that said, bearish scope for baseload power prices may have been limited by slightly lower renewables across the next 7-days.
The latest NESO week-ahead generation forecast shows that average day and overnight (minimum) wind and solar generation will average at 2.9GW from 4th to 10th June, a slight decrease from the 3.7GW recorded for the previous period, highlighting that more CCGT may be needed to help balance the British grid.
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Price commentary courtesy of Crown Gas and Power 