Gas prices decline as demand falls

Gas prices continued to decline on Thursday as high wind output combined with losses in the carbon market.

The biggest moves were once again observed at the front-end, with the April 24 front-month contract shedding almost 0.10p/kWh when compared to its previous close.

According to data from National Grid, wind power generation rose by more than 240% when compared to the previous gas-day, limiting the contribution of gas-fired power plants within the power generation mix and marginally lowering total gas demand day-on-day.

Furthermore, losses posted across carbon, oil and coal markets may have extended bearish sentiment to contracts further out. Data from ICE shows that the Carbon EUA benchmark contract saw a daily loss of just over 2.5%, with smaller downward moves observed across oil and coal counterparts.

Prices have opened in firm territory in the morning trades, with the Summer 24 front-season contract currently being offered circa 0.07p/kWh above its previous settlement, at time of writing.

The UK is currently consuming just 32.74 GW’s of electricity at the time of writing (14:30 – 15:00), still helped by the mild temperatures.

Wind remains the primary source of electricity today and is currently contributing 14.34 GW’s (41.96%) of the UK’s electricity generation at the time of writing. Gas is currently being used to generate just 3.28 GW’s (9.60%) of the total currently.

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