Wholesale prices increase amid lower Norwegian imports
Gas prices increased at the NBP on Friday, as lower Norwegian imports and lingering Ukrainian transit risks came back into focus.
Much of the previous session’s losses were back pedaled following clarification that the Ukraine-Azerbaijan transit deal had not been formally agreed.
The biggest moves were posted across the prompt and near-curve, with the October 24 front-month contract strengthening by circa 4.8p/therm (0.16p/kWh) amid falling Norwegian output. Data from offshore operator Gassco shows that Norwegian gas flows into Britain’s Easington terminal fell by a considerable 40.4% when compared to the previous gas-day following a brief extension to planned maintenance at the Nyhamna gas processing facility.
Contracts further out likely found support from news that the widely reported Ukraine-Azerbaijan transit deal had not been formally agreed or signed by either country. The rumoured agreement, originally reported by Ukrainian outlet Ukrainska Pravda, was a driving force behind the sharp losses observed on Thursday and the subsequent failure to validate it will have undoubtedly knocked confidence in supplies beyond December 24, when the existing Russia-Ukraine transit agreement comes to an end.
On the LNG front, only two laden vessels are currently signalling to arrive at British terminals before 18th October. With that said, the UK has healthy LNG storage reserves which are currently around 50% fuller than the same date last year (data from National Gas). Natural gas prices have so far resumed their upward trajectory this morning, with the Winter 24 front-season contract currently being offered circa 1.25p/therm (0.04p/kWh) above its previous settlement, at time of writing.
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Price commentary courtesy of Crown Gas and Power 