Wholesale prices down amid strong gas imports from Norway

Stronger supplies from Norway combined with increasing continental imports to help protect gas prices from further upside on Thursday.

The Day-ahead contract softened by around 1p/therm (0.03p/kWh) in response to a slight increase in supplies, with contracts further out posting small mixed moves in each direction when compared to the previous close.

According to data from Gassco, Norwegian flow nominations into the Easington and St Fergus terminals saw a day-on-day increase of 12% amid the conclusion of unplanned maintenance at the Kårstø processing facility.

At the same time, an increase in supplies from the Dutch and Belgian interconnectors also helped to fend off additional demand from the ongoing cold snap. Data from National Gas shows that the two pipelines were supplying more than 30mcm by the end of the day, a sharp increase of 250% when compared to Tuesdays gas-day.

Low winds forecast for Friday will keep the British system extremely tight due to high gas-fired power demand.

At time of writing, wind power is accounting for only 6.5% of the power generation mix, with gas contributing around 53% (data from National Grid).

This morning, gas prices have opened at a considerable discount when compared to the previous close, despite short term system tightness, with the February 25 front-month contract currently being offered circa 4p/therm (0.14p/kWh) below its previous settlement, although many contracts are yet to trade at time of writing.

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Price commentary courtesy of Crown Gas and Power