Wholesale prices steady helped by healthy gas storage levels

Gas prices were relatively unchanged on Monday as positive short-term supply fundamentals contended with long-term geopolitical risks.

Mixed moves of no more than 0.5p/therm (0.017p/kWh) were observed along the curve, a stark contrast when compared to the elevated volatility we have seen of late. Active conflict in areas such as in the Middle East and at the Russia-Ukraine border likely continued served as a price floor at European gas hubs due to the associated risks to production and transmission infrastructure.

Yesterday, UK Prime Minister Keir Starmer advised British citizens currently residing in Lebanon to leave the country immediately. Furthermore, the Ministry of Defence has reportedly dispatched 700 troops to nearby Cyprus in order to facilitate the rapid evacuation of some 10,000 British nationals currently residing in the country.

These measures come hot on the heels of Monday’s airstrikes in which the daily death toll reached numbers not seen since the 2006 Israel-Lebanon war.

At the same time, high levels of storage in both the EU and UK should help to ease supply risks over the coming winter. According to data from Gas Infrastructure Europe, aggregated EU storage reserves are now 93.74% full. This is just below the same date last year [94.64%] and well above the 10 -year moving average [86.71%].

Similarly in Great Britain, reserves currently stand at 24.6TWh, an increase of 17.1% from one year ago (data from National Gas).

This morning, gas prices have edged higher at the NBP, with the Winter 24 front-season contract currently being offered circa 1p/therm (0.03p/kWh) above its previous settlement, at time of writing.

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Price commentary courtesy of Crown Gas and Power