Constrained supplies from Norway push wholesale prices up

Following on from a relatively settled session, gas prices were propelled higher at the NBP on Wednesday.

Considerable gains were posted across the curve, as constrained Norwegian supplies contributed to a slump in European storage injections. According to data from Norway’s Gassco, the unplanned outage at Kårstø processing facility was upgraded intraday from 50mcm/d to 62mcm/d and the event was extended until at least Friday 27th.

This likely contributed to a 35.1% drop in Norwegian flows to Great Britain when compared to the previous gas day.

Unseasonably high demand added to the bullish sentiment. The latest run of our 14 day model shows that demand will remain elevated above seasonal norms until at least 9th October which may further tighten the short term supply dynamic.

In other news, the Israel-Hezbollah conflict continues to escalate, with Israel’s military Chief of Staff advising troops to prepare for a possible ground invasion of southern Lebanon.

Air strikes yesterday are reported to have killed 72 people, with this latest wave of strikes prompting 12 allies including the US, UK and France to call for a 21-day ceasefire. Israel’s Prime Minister Netanyahu is set to address the United Nations later this week.

This morning, gas prices are currently being offered at a slight discount, with the Winter 24 front-season contract currently being offered circa 1p/therm (0.03p/kWh) below its previous settlement at time of writing.

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Price commentary courtesy of Crown Gas and Power