Drop in temperature and Light winds adds pressure to wholesale gas prices

Day ahead natural gas prices nudged upwards on Monday amid bullish weather fundamentals and plentiful LNG.

The front-month November-23 contract saw an increase of around 0.14p/kWh when compared to its previous settlement.

A drop in temperatures and a considerable decrease in wind generation added pressure to contract prices at the front-end. A revised weather outlook shows that temperatures are expected to drop below seasonal norms over the coming week. This combined with a 69% decrease in wind-output, which bolstered gas-fired power demand by a huge 170% day-on-day (data from National Grid).

However, a positive LNG outlook perhaps kept a lid on contracts climbing even higher. Shipping signals show that six laden vessels are set to berth on British shores over the next two weeks, including the Shagra which is scheduled to offload Egyptian volumes later today.

Gas prices opened in negative territory in early trade this today (24/10/2023), although prices are now moving towards their previous close at time of writing.

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