High wind helps settle wholesale market
High wind combined with milder weather to reduce gas prices on Friday.
Further downside of circa 1.5p/therm (0.05p/kWh) was posted on both the front-month and front-season contracts with the bears seemingly poised to extend the losses observed in the prior two sessions.
Improved wind output likely played into the bearish sentiment. According to data from National Grid wind turbine generation accounted for 44% of the GB power mix across Thursdays gas-day, with the contribution of gas-fired plants falling to just 21% over the same period, contributing to a sharp drop in overall system demand.
Subsequently, total British demand dived from 291mcm to 250mcm (day-on-day), highlighting a return to below yesterday’s seasonal norm of 268.9mcm (data from National Gas).
In other news, remaining EU buyers of Russian gas, particularly in Central and Eastern Europe will be reassured to hear that Vladimir Putin’s decree that all Russian gas invoices must be paid to Gazprombank in Russian rubles has been amended to allow payments via third party bank accounts, easing the process of payment (particular currency conversion) for some companies and allowing them to work around recent US sanctions on Gazprombank.
This morning, gas prices are being offered broadly in line with yesterdays close, with the January 25 front-month contract last trading just circa 0.5p/therm (0.02p/kWh) below its previous settlement at time of writing.
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Price commentary courtesy of Crown Gas and Power 