Prices edge higher amid supply issues from Norway

Gas prices edged higher on Friday amid bullish oil futures and incoming Norwegian supply curtailments.

Small, incremental gains of circa 0.4p/therm (0.014p/kWh) were posted across the majority of curve contracts, marking a relatively settled session. A surge in oil prices may have served as an underlying source of the increases on Friday. According to data from ICE, the Brent Crude benchmark contract was propelled 2.3% to $79.02 per barrel amid signals of an improving economic outlook in the United States.

The latest wave of scheduled maintenance in Norway will be a central focus for market participants over the next few weeks.

Data from offshore operator Gassco shows that offline capacity will rise from 34.4mcm today (Tuesday) to 136.46mcm on Friday. The UK’s Easington terminal will be shut down for two weeks starting 2nd September due to yearly maintenance, removing 72.7mcm of capacity and significantly impacting Norwegian pipeline exports to Great Britain.

Above-average storage levels in the UK and EU likely helped to keep a lid on prices however, with the latest data from National Gas showing that storage facilities in Great Britain are now 94.7% full, which is 18% higher than the same date last year.

In other news, the bank holiday weekend brought with it reports of a renewed wave of Russian attacks on Ukrainian energy infrastructure. The Ukrainian Air Force claims that more than 100 drones and missiles on Sunday evening, continuing into Monday morning. The attack is considered to be the largest of its kind since the 2022 invasion.

This morning, gas prices have opened slightly higher, with the Winter 24 front season contract currently being offered circa 1.75p/therm (0.06p/kWh) above its previous settlement, at time of writing.

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Price commentary courtesy of Crown Gas and Power