Wholesale prices maintain upward trajectory
Gas prices resumed their upward trajectory on Tuesday amid escalating geopolitical tensions and looming Norwegian maintenance.
The majority of curve contracts edged higher as developments in the Middle East seemed to put European gas hubs on edge. A targeted air strike was carried out in the Lebanese capital of Beirut after Israel promised retaliation for last weekends attack on the Golan Heights region that killed 12 people. Israel has claimed to have killed Hezbollah’s top military commander as a result of the strike, but this has yet to be confirmed by any official representing the group.
Market participants will now be closely monitoring the situation in case of a retaliation from Hezbollah, or any other states allied with the organization.
At the same time, a sharp increase in planned Norwegian maintenance next month in the context of a quiet LNG delivery schedule will serve to tighten the screw on European supplies over the next few weeks.
According to data from offshore operator Gassco, capacity will be removed at a rate of 139.69mcm by the end of August with the same wave of summertime maintenance expected to peak at 181.49mcm/day in mid-September.
All of this combines to increase pressure on prices this morning, with the Winter 24 front-season contract currently being offered circa 0.75p/therm (0.026p/kWh) above its previous settlement, although it has softened slightly since breaching the 100p/therm (3.41p/kWh) psychological level earlier today.
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Price commentary courtesy of Crown Gas and Power 