Prices drop further despite gas storage level concerns

NBP gas prices reduced further on Wednesday, despite geopolitical uncertainty surrounding the war in Ukraine and enduring storage concerns.

The Winter 25 contract experienced the most significant reductions, with daily declines of approximately 4.8p/therm (0.16p/kWh).

Additionally, the Summer 25 front-season contract managed to dip below the 100p/therm psychological level by the end of the day.

Muted demand expectations over the next few days may have been a key bearish driver. According to the latest run of our latest 14-day model, demand is projected to remain below seasonal norms until 11th March.

This could enable the UK to bolster its storage levels through increased injections, a trend already observed over the past couple of days (data from National Gas).

As of 4th March, aggregated EU storage facilities were only 37.32% full, significantly lower than the 61.85% recorded on the same date last year.

This substantial deficit of over 24 percentage points suggests that refilling storage will be more challenging in the coming months when compared to the previous two summers.

This morning, the NBP has opened at a small premium when compared to yesterdays close, with both the front-summer and winter contracts each being offered still close to key levels.

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Price commentary courtesy of Crown Gas and Power