Gas prices retrace previous gains as wind generation improves
On Tuesday, natural gas prices at the NBP retraced, influenced by strengthening wind power generation and a weaker carbon market.
The Winter 25 contract experienced a daily loss of 4.4p/therm (0.15p/kWh), narrowing its premium over the Summer 25 contract by just under 1p/therm (0.03p/kWh).
A recent uptick in wind power generation has helped to reduce overall system demand. According to National Grid data, wind turbine output averaged 4.1 GW on Friday, increased to 6.6 GW on Monday and then rose a further rose to 10.8 GW on Tuesday, thereby reducing gas-fired demand during this period.
A steadily falling carbon market may have served a secondary bearish driver for contracts further out. ICE market data shows that the Carbon EUA benchmark contract saw daily losses of 4.3% on Tuesday, meaning that the contract has lost a considerable 18.4% of its value since January 31st.
In other news, the Irish Government has approved the implementation of a floating FSRU-based LNG vessel. Historically, Ireland has rejected LNG projects due to environmental concerns, but recent considerations of energy security mean that this new vessel has been greenlit for use as an emergency regasification and storage facility.
The market is holding firm this morning, with the majority of contracts currently being offered very much in line with their previous settlements, although many have yet to trade at time of writing.
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Price commentary courtesy of Crown Gas and Power 