Prices up as UK cold snap persists

A cold weather outlook and escalating geopolitical tensions lifted gas prices on Friday.

Freezing temperatures and increased demand once again served as a prime source of support throughout the session and resulted in gains of 0.07p/kWh posted across near-curve contracts.

According to our latest 14-day demand forecast, demand is set to outpace seasonal norms until at least 20th January, likely on the back of the cold spell currently gripping much of Northern Europe.

A fresh round of attacks on shipping vessels passing through the Red Sea/Suez route prompted the US and UK to instigate air strikes within Houthi controlled areas of Yemen, reinforcing fears of a wider, more prolonged conflict in the region.

In other news Qatar suspended some LNG cargoes set to pass through the Bab el-Mandeb strait over the weekend on the back of US-led airstrikes in nearby Yemen, squeezing already constrained LNG shipments coming out of the region.

Gas prices have seemingly broken free of their upward trajectory this morning, with the Summer 24 front-season currently being offered circa 0.01p/kWh below its previous settlement at time of writing.

If we check the latest half hourly period at the time of writing (09:30 – 10:00), electricity demand is currently 46.84 GW’s in the UK.

Wind generation is playing a much bigger part today with 36% of the UK’s power being generated from on-shore and off-shore turbines at the moment.

Specifically, 36.07% (16.90 GW’s) of the UK’s total electricity is being generated from wind turbines currently with gas slightly ahead and contributing 18.43 GW’s (39.34%).

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