Wholesale prices edge higher as demand increases

NBP gas prices edged higher on Monday, as surging demand outpaced supplies.

Modest gains were posted across the near-curve, with the November 2024 front-month contract rising by 1.7p/therm (0.06p/kWh) day-on-day, marking the session’s biggest movement.

A significant rise in demand for gas-fired power likely provided key support at the front end. Data from National Grid indicated that Combined Cycle Gas Turbines (CCGT) accounted for 48.5% of the power generation stack (around 15GW) on Monday’s gas day. This increase was due to reduced wind turbine output, which led the grid operator to issue an automated power shortfall notice, warning that projected supplies would be insufficient to meet demand. However, this shortfall was later corrected, and the notification was dismissed at around 2pm.

The recent spell of cold, calm weather across Northwest Europe may have further tightened the supply picture. National Gas data showed that the British system (NTS) was 16.1mcm undersupplied by 8:00 AM BST, although this deficit slightly improved as the session progressed.

Meanwhile, an increase in LNG supply may have helped to soften the bullish sentiment. The UK has one of the largest LNG storage and regasification capacities in Europe.

National Gas data shows that send out averaged around 39 mcm/d on Monday, a significant rise from the approximately 12 mcm/d recorded on Friday, which likely helped to rebalance the UK’s grid.

This morning, gas prices have opened in negative territory, with the Summer 25 front-season contract currently being circa 2.5p/therm (0.09p/kWh) below its previous settlement, at time of writing.

If you want to see more information on the wholesale market trends subscribe to our weekly report here.

Price commentary courtesy of Crown Gas and Power