Near capacity gas storage levels help day ahead prices

Day ahead gas prices continued to ease down on Monday amid plentiful European LNG gas storage levels.

The biggest losses in the session were posted at the front-end with all curve contracts following the same downward trend.

The end result was drop of circa 0.27p/kWh in the value of the December front-month contract, likely pressured by plentiful European storage levels. The latest data from Gas Infrastructure Europe shows storage stocks are now more than 99% full, an increase of almost 5% when compared to the same day last year, providing some much-desired supply certainty as we move further into the winter months.

Additional pressure also likely came due to unseasonably low gas demand. According to data from National Gas, demand was forecast to fall to 224.1mcm/day on Monday, a considerable 37mcm/day below the seasonal norm and subsequently resulted in the British system being oversupplied by 4.4mcm at 3pm GMT Monday.

This morning, gas prices have rebounded at the NBP with the December-23 contract last trading around 0.14p/kWh above its previous close at time of writing.

If we check the latest half hourly period today (10:00 – 10.30), 33.66% (12.90 GW’s) of the total electricity (36.30 GW’s) being generated in the UK is coming from wind generation with gas at a close second at 24.38% (9.35 GW’s).

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