Day ahead prices go up as we use more gas
Day ahead gas prices rebounded on Tuesday reversing some of the losses posted in the previous session.
During morning trade, contract prices continued to fall throughout the session before swiftly changing direction in late afternoon trade with key contracts rallying (and closing) above Monday’s closing levels.
The Summer-24 contract settled circa 0.1p/kWh above its previous settlement, potentially influenced by higher gas demand and a 14% increase in CCGT offtake (combined-cycle gas turbine). According to data from National Gas, forecast demand moved up by circa 1.5% day-on-day, likely driven by a drop in wind and solar generation which subsequently prompted a larger dependency on gas-fired generation.
However, upward pressure was perhaps subdued by considerable losses posted on the oil market which likely helped to keep a lid on further gains being made. Data from ICE shows the Brent Crude benchmark contract shed $3.5/barrel on Tuesday, the largest drop in a single session since the 4th of October and plummeting to its lowest close since 21st of July.
This morning, day ahead gas prices have opened in negative territory; the December-23 front-month contract last traded around 0.1p/kWh below its previous close at time of writing.
It’s really windy today and if we check the latest half hourly period at the time of writing (13:00 – 13.30), 44.17% (17.36 GW’s) of the total electricity (37.05 GW’s) being generated in the UK is coming from wind generation with gas at a close second at 13.21% (5.19 GW’s).
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