Plummeting demand forces gas prices down

Plummeting gas demand combined with higher wind output to hammer down gas prices on Monday.

The majority of contracts posted losses of circa 0.09p/kWh when compared to their previous close. A sudden drop in demand likely helped the most. National Gas data shows that demand totaled 161.4mcm on Monday which was a massive 86.2mcm below seasonal norms, thanks in part to higher wind output and milder temperatures.

According to data from National Grid, wind output increased sharply from just 1.4GW on Friday to average 9.8GW across the gas-day. This coincided with a 66% drop in CCGT (Combined Cycle Gas Turbine) power demand over the same period.

Subdued Norwegian supply likely prevented prices from falling any further, data from offshore operator Gassco shows that Langeled pipeline flows fell to just 6.6mcm, down from 29.4mcm on Friday amid the onset of widespread summertime maintenance across the (NCS) Norwegian Continental Shelf.

In other news, the Norwegian Ministry of Energy has confirmed that the Bestla field has been given the go ahead for development. Expected to come online as soon as 2027, the 24 million BOE (Barrel of Oil Equivalent) project will make use of existing infrastructure at the nearby Brage oil field.

Natural gas prices have rebounded slightly this morning, with the Winter 24 front-season contract currently being offered circa 0.06p/kWh above its previous settlement, at time of writing.

The UK is currently consuming 32.24 GW’s of electricity (09:30 – 10:00).

It’s still windy today! The UK’s onshore and offshore wind turbines are currently generating 12.50 GW’s (36.08%) of the UK’s total electricity with gas for power only having to generate 1.73 GW’s (5.00%) of the total.

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