Wholesale energy price spikes amid Norwegian supply issues
Gas prices were divided at the NBP on Monday with lower Norwegian flows putting pressure on the prompt price whilst high storage levels and tumbling oil futures reduced prices further out.
The biggest moves of the session were posted at the front-end, with the NBP Day-ahead contract surging 9.5p/therm (0.32p/kWh) above its previous close in response to an undersupplied British system. Norwegian supply constraints likely served as a key source of support, data from Gassco shows that flows into the UK’s Easington and St Fergus terminals totaled 51.3mcm on Monday which represented a sharp decrease of 22.4% when compared to Fridays gas-day.
An unplanned outage totaling 6.6.mcm at Norway’s Gullfaks C platform may have contributed to the drop in export flows, with operator Equinor remarking in a statement that workers had needed to be evacuated due to a ‘well control incident’, although it appears to have been resolved as of this morning.
Further along the curve, reductions of just circa 0.5p/therm (0.017p/kWh) were observed, potentially in response to weakness across other energy markets such as oil and coal. According to data from ICE, the Brent Crude benchmark shed 2.5% on the back of unexpectedly low demand in China and indications that Israel had accepted a US mediated ‘bridging proposal’, raising hopes of a possible ceasefire between Israel and Hamas and an easing of geopolitical tensions in the Middle East.
This morning, gas prices have opened in negative territory, with the Winter 24 front-season contract currently being offered circa 1p/therm (0.034p/kWh) below its previous settlement at time of writing.
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Price commentary courtesy of Crown Gas and Power 