Cold weather increases demand and propels wholesale prices higher

NBP gas prices were propelled higher on Monday, despite steady LNG imports.

Moderate upside was observed at the front-end, with the January 25 front-month contract posting gains of circa 2p/therm (0.07p/kWh) when compared to its previous close, with stubbornly high demand expected to persist well into next month.

The latest run of our 14-day model indicates that the overall bullish demand outlook is now expected to persist until at least 16th December, supported by cooler temperatures forecasted from this Saturday.

Unplanned maintenance at a UK asset may have also served as an underlying source of support. According to data from National Gas, the Barrow (North Terminal) has been offline since 26th November due to a technical process issue that is not expected to be resolved until 15th December and slightly hampering domestic production over the period.

It wasn’t all plain sailing for the bulls however, with otherwise robust supplies helping to keep a lid on prices. According to shipping signals, up to 11 vessels could berth at British terminals over the next two weeks, with the Sonangol Etosha scheduled to offload Angolan volumes at the Isle of Grain terminal later today.

This morning, gas prices are relatively unchanged, with key contracts currently being offered not too far from their previous settlement, although many are yet to trade at time of writing.

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Price commentary courtesy of Crown Gas and Power