Prices forced up as demand increases and storages fall

NBP gas prices continued to gather strength on Friday, with a firm demand outlook and relatively weak storage levels combining to force prices up.

The biggest gains in Friday’s session were centered around the front-month and front-season contracts (each rising by around 3p/therm – 0.1p/kWh) reflecting tight supply margins, depleted storage and the return of freezing temperatures.

According to the latest 14-day forecast model, demand is expected to rise above seasonal norms from Wednesday 12th, averaging comfortably above-average until at least 23rd February.

Persistent bouts of below average temperatures and poor renewable generation across the first few weeks of 2025 have hammered European storage levels down to 49.02% as of 8th February, meaning the EU’s reserves are now 18.35% below the same date last year and 19.08% lower than in 2023.

Market fundamentals were not entirely bullish however, with steady flows from Europe’s largest supplier Norway helping to provide some reassurance in an otherwise uncertain supply and demand dynamic.

According to data from Gassco, pipeline exports into Great Britain’s Easington and St Fergus terminals totaled 94.48mcm on Friday, making up around a third of the supply mix.

Maintenance has been minimal across Norwegian North Sea assets at the moment, with the national operator opting to push some scheduled works later in the year in order to ease constraints this coming summer.

This morning, the NBP has opened in bullish mode once again, with the Summer 25 front-season contract having already rocketed to a premium of circa 6p/therm (0.2p/kWh) when compared to its previous settlement at time of writing.

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Price commentary courtesy of Crown Gas and Power