Strong wind conditions helps reduce gas demand
A combination of stronger wind output and weak gas demand gave way to reductions to gas prices on Tuesday.
Small, incremental losses of circa 0.034p/kWh were posted across the majority of curve contracts. Improved wind output likely played into the bearish sentiment; according to data from National Grid, wind turbine output surged from 1.3GW to 7.4GW, contributing to a 54% drop in gas-fired power demand over when compared to Fridays gas-day.
Unseasonably low demand continued to serve as a source of help, data from National Gas shows that total demand fell to 149.3mcm across the gas-day, representing a substantial drop of 17.5mcm (10.5%) again when compared to Friday.
It wasn’t plain sailing however, with unplanned maintenance in across the UK and Norway serving to tighten pipeline supplies. According to GB REMIT, a sudden drop in flows at the UK’s Elgin-Franklin and Cygnus gas fields alongside 23mcm of offline capacity at Norway’s Kollsnes facility possibly undermined the overall bearish sentiment.
This morning, gas prices have opened very much in line, with the June 24 front-month contract currently being offered 0.17p/kWh below its previous settlement at time of writing.
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