Gas prices soften amid oversupplied British system

Gas prices softened on Wednesday amid an oversupplied British system and a bearish demand outlook.

Small, incremental losses of no more than 0.026p/kWh were posted across the majority of contracts when compared to their previous close.

Plummeting system demand likely served as a key source of prices easing, data from National Gas shows that demand fell 10.6mcm to total 164.4mcm across Wednesdays gas-day which was a considerable 64.1mcm below seasonal norms.

Our 14-day model maintains that demand will remain muted as far out as 22nd May, with reports of continued warm weather helping to keep a lid on domestic demand.

On the storage front, the latest data from Gas Infrastructure Europe shows that overall EU storage is holding strong at just under 63% full, up 1% from the same date last year.

The EU managed to meet its 90% fullness target by 18th August last year, almost 11 weeks earlier than the November 1st deadline. Current levels highlight that the bloc is on a trajectory very much in line with last year and therefore could be on track to fill up reserves well-ahead of time once again.

NBP gas prices have opened at a slight premium this morning, with the Winter 24 front-season contract currently being offered circa 0.017p/kWh above its previous settlement, at time of writing.

The UK is currently consuming 29.47 GW’s of electricity (09:30 – 10:00).

The UK’s onshore and offshore wind turbines are only currently generating 3.57 GW’s (11.20%) of the UK’s total electricity with solar generation at 6.31 GW’s (19.79%) and gas for power generating 7.27 GW’s (22.81%) of the total.

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