Cold weather and unplanned outages combine to pressure wholesale gas prices

A continuation of bullish fundamentals meant that day ahead gas prices increased on Tuesday.

Mixed moves were observed across the curve with near-dated contracts gaining 0.03p/kWh when compared to their previous settlement, whilst contracts further out posted small losses.

Expectations of cooler weather likely served as a prime reason for the increases at the front-end. According to reports, a cold snap is anticipated to hit the UK with some of the country expected to see snowfall on Thursday; likely resulting in higher heating-related demand.

Furthermore, unplanned outages at the Norwegian Troll and Nyhamna gas facilities also played into the bullish sentiment. The unscheduled maintenance (which is currently taking 67.4mcm/day offline) was expected to be resolved by the 8th of February, however an update from offshore operator Gassco shows the outages at the Troll field have an uncertain duration.

Gas prices have opened in negative territory this morning with the Winter-24 contract last trading circa 0.034p/kWh below its previous close at time of writing.

If we check the latest half hourly period at the time of writing (13:30 – 14:00), electricity demand is currently 37.57 GW’s in the UK.

The wind has dropped significantly this morning. Only 7.63% (3.13 GW’s) of the UK’s total electricity is being generated from wind turbines currently with gas contributing a massive 20.09 GW’s (48.92%).

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