Gas prices edge higher amid bleak LNG supply outlook

Gas prices edged higher at the NBP on Thursday in response to a bleak LNG outlook and lingering capacity restrictions in Norway.

The majority of contracts registered small daily gains of no more than 0.9p/therm (0.03p/kWh) due in part to the continents need to lift prices in order to attract more spot LNG cargoes.

On the LNG front, shipping signals suggest that no vessels are expected to arrive at UK terminals over the next 7 days; only 2 vessels berthed at Milford Haven and Isle of Grain in the first two weeks of June, down from 4 recorded for the same time last year.

The continuation of repair work at a key offshore platform supplying the Wheatstone LNG in Western Australia will no doubt have East Asian hubs on especially high alert due to the extreme temperatures currently being experienced across the region thus driving up spot prices and diverting vessels away from Europe. Unscheduled maintenance in Norway no doubt served as an underlying source of support, an unplanned outage at the Visund field continues to reduce production at a rate of 15.4mcm/d and is not expected to be resolved until at least Sunday 23rd June (data from offshore operator Gassco).

NBP contracts have opened at a slight discount this morning, with the Summer 24 front-season contract currently being offered circa 0.75p/therm (0.025p/kWh) below its previous settlement, at time of writing.

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