Wholesale energy market stable amid mixed supply fundamentals

Gas prices held firm at the NBP on Thursday amid looming Norwegian supply cuts against high storage levels.

Subtle price movements of no more than 1.5p/therm (0.05p/kWh) were posted across the curve as the market struggled to establish a clear direction. A scheduled ramp up in offline Norwegian capacity will no doubt have market participants on their toes over the next few weeks with data from Gassco showing that offline capacity across the NCS (Norwegian Continental Shelf) reached 42.94mcm on Thursday.

This latest wave of essential maintenance will reach 183.46mcm by 2nd September with huge curtailments expected to persist across the entire month of September.

This will naturally leave the European market more exposed to supply risks elsewhere such as lower LNG deliveries or higher demand due to adverse weather conditions, but high storage levels in both the EU
and the UK will no doubt help to ease potential supply disruption over this period.

The latest data from National Gas shows that storage in Great Britain is currently at around 27.9 TWh which is more than 91% of listed capacity, not too far behind other major European consumers such as Germany (94%) and Italy (92%), though their capacity is comparatively much larger.

The NBP has opened at a slight discount this morning, with the Winter 24 front-season contract last trading circa 0.5p/therm (0.017p/kWh) below its previous settlement at time of writing, as the majority of contracts continue to ebb and flow within a narrow range.

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Price commentary courtesy of Crown Gas and Power