Fluctuating gas prices struggle to establish clear direction

Gas prices struggled to establish a clear direction on Monday as climbing Norwegian output countered dwindling LNG supply.

Gas prices fluctuated within a narrow range when compared to Friday’s substantial losses, contracts across the near-curve posted marginal day-on-day losses of circa 0.017p/kWh, contrasting similarly sized gains observed across the far-curve.

Strong Norwegian exports to Great Britain likely helped reduce pressure. Data from offshore operator Gassco shows that flow nominations into Easington terminal increased by 35% day-on-day, coinciding with the conclusion of planned maintenance at the Troll field.

On the other hand, a sharp drop in LNG flows likely served as a growing source of increases and prevented further price drops. Shipping data indicates that only 4 vessels have arrived since 13th April and only 1 laden vessel is scheduled to arrive over the next 7 days.

The lacklustre frequency of deliveries we have seen as of late seem to be taking a toll, data from National Gas shows that LNG send out averaged at a rate of just circa 9mcm/d across the session, down dramatically from the figure of circa 84mcm/d that was recorded on 12th May 2023.

In other news, a new round of Ukrainian strikes was carried out on Russian oil infrastructure over the weekend. A fire reportedly broke out at the Volgograd oil refinery late Friday/early Saturday following an overnight drone strike. This same facility was taken offline by a drone strike in February and had only resumed normal operations in April.

Gas prices are relatively unchanged so far this morning, with both the front-month and front-season contracts currently being offered very much line when compared to their previous settlement, at time of writing.

The UK is currently consuming 29.66 GW’s of electricity (09:30 – 10:00).

The UK’s onshore and offshore wind turbines are currently generating 8.81 GW’s (27.74%) of the UK’s total electricity with solar generation at 2.39 GW’s (7.51%) and gas for power generating 9.06 GW’s (28.54%) of the total.

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