Buoyant LNG delivery schedule helps reduce wholesale prices
Gas prices plummeted on Friday, erasing some of the bullish momentum built up across last week as a strong LNG delivery schedule helped ease the pressure.
Bearish sentiment was seemingly strongest at the front-end, with the December 24 front-month contract posting the biggest losses beyond the prompt, after falling circa 4.8p/therm (0.16p/kWh) when compared to its previous close (data from ICE).
A strong LNG supply outlook likely helped reduce the pressure with the latest shipping signals indicating that up to 10 vessels could berth at UK terminals over the next 7 days, with one additional vessel, the Grazyna Gesicka having already arrived at the Isle of Grain terminal this morning.
A slight drop in demand may have also helped to guide prices lower. According to data from National Gas, British system demand fell to 320mcm on Friday, down from 338mcm the day prior. According to data from National Grid, slightly stronger wind output meant that gas-fired (CCGT) demand reduced by circa 22.5% when compared to Thursday which may have contributed to the decline in system demand.
This morning however, gas prices have opened considerably higher, with both the front-month and front-season contracts currently being offered circa 3p/therm (0.1p/kWh) above their previous settlements, at time of writing.
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Price commentary courtesy of Crown Gas and Power 