Gas prices ease amid good supply and falling demand

Gas prices eased on Friday amid a good supply and a fall in demand.

Key contracts kept within a much narrower range when compared to Thursday’s volatility, with improved Norwegian output and falling demand helping to foster confidence at European hubs.

An uptick in Norwegian exports likely helped. Data from offshore operator Gassco shows that flow nominations into the UK’s Easington terminal increased by 48% day-on-day amid the conclusion of unplanned maintenance at the Dvalin gas field.

A subdued demand outlook on the back of a warm front likely served as an additional source of pressure. The latest run of our 14-day model shows that demand will remain well-below seasonal norms until at least 20th May, coinciding with reports of continued mild weather across much of May.

Prices have rebounded a little this morning, with the Winter 24 front-season contract last trading 0.09p/kWh higher when compared to its previous settlement, at time of writing.

The UK is currently consuming 31.29 GW’s of electricity (09:30 – 10:00).

The UK’s onshore and offshore wind turbines are currently only generating 2.46 GW’s (7.30%) of the UK’s total electricity with gas for power having to generate 10.51 GW’s (31.18%) of the total. Fortunately, above average temperatures is helping put a cap on demand.

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