Gas prices relatively unchanged as demand stays low

Gas prices were relatively unchanged on Wednesday, with weak demand helping to offset LNG supply concerns.

Contracts continued to trade within a narrow range, with the Winter 24 front-month contract posting losses of less than 0.017p/kWh when compared to its previous close.

The continuation of unseasonably low demand likely helped keep a lid on increases. According to data from National Gas, total British demand slid to 173.2mcm across Wednesday which was a considerable 56.5mcm below seasonal norms.

Furthermore, our 14-day model shows that demand will remain below seasonal norms until at least 29th May amid the continuation of mild weather.

It wasn’t all plain sailing however, with yet more news of LNG supply disruption serving to erode confidence in long-term supply.

Reports of a fire at a Nigerian LNG plant, along with the ongoing power failure at Malaysia’s Bintulu facility (when taken in the context of an already sparse UK delivery schedule) comes as unwelcome news to European gas hubs who are currently focused on refilling storage facilities.

Prices have opened slightly higher this morning, with the June 24 front-month contract currently being offered circa 0.034p/kWh when compared its previous settlement, at time of writing.

The UK is currently consuming 30.79 GW’s of electricity (11:00 – 11:30).

The UK’s onshore and offshore wind turbines are currently generating only 2.70 GW’s (8.32%) of the UK’s total electricity with solar generation at 3.56 GW’s (10.98%) and gas for power generating a significant 12.66 GW’s (39.05%) of the total.

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