Global LNG supply fears force prices up

Global LNG supply fears combined with an undersupplied British system to further strengthen gas prices on Tuesday.

The biggest moves were posted at the front-end, with near-curve contracts rising circa 0.12p/kWh when compared to their previous close.

Lingering fears surrounding the future of US LNG supply likely served as a key source of rises; a stall in new LNG projects in the context of a hostile Suez delivery route has the potential to squeeze European imports of the fuel.

A tight British supply/demand dynamic may have also played into the bullish sentiment.

According to data from National Gas, the NTS (National Transmission System) averaged 6.5mcm/d short across the session, possibly on the back of a circa 15% rise in LDZ demand when compared to the previous day.

This morning, although contracts had initially resumed their upward trajectory, although most are now heading back towards their previous settlement at time of writing.

If we check the latest half hourly period at the time of writing (10:30 – 11:00), electricity demand is currently 42.69 GW’s in the UK.

As the UK is being buffeted by high winds currently, wind turbines are contributing over 42% of the UK’s total electricity demand.

Specifically, 42.27% (18.63 GW’s) of the UK’s total electricity is being generated from wind turbines currently with gas only contributing 11.69 GW’s (26.52%).

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