Soaring demand forces wholesale prices higher
Surging gas demand along with a rapid rate of storage withdrawals propelled NBP gas prices higher on Wednesday.
The near-curve saw a swift reversal of the previous sessions losses as prices continued to meander around year to-date highs. According to data from National Gas, system demand reached circa 315mcm on Wednesday, this was more than 65mcm above the seasonal norm [247.1mcm] and up from around 295mcm the previous gas-day.
With that said, the latest run of our 14 day model shows that demand will hold closer to seasonal averages across the next two week outlook thanks in part to slight upward revisions to temperature forecasts.
On the storage front, European storage facilities continue to be hammered by the freezing temperatures the region has seen as of late. Data from Gas Infrastructure Europe shows that reserves are currently 89.87% full, exactly 9 percentage points below the same date last year [98.87%].
NBP contracts have so far resumed their upward trajectory this morning, with the December 24 front-month contract currently being offered a substantial 2.5p/therm (0.09p/kWh) above its previous settlement, at time of writing.
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Price commentary courtesy of Crown Gas and Power 