Subdued demand helps market recover from previous rises

On Friday, hopes of a Russia-Ukraine peace deal combined with a subdued demand outlook to partially reverse sharp gas prices gains posted in the previous session.

The market appeared to ditch much of Thursdays upward momentum during morning trade. Despite initially opening at a slight premium; gas prices gradually declined throughout the session with the Summer 25 front-season contract closing circa 1.5p/therm (0.05p/kWh) lower when compared to its previous settlement.

The majority of market participants had been looking ahead to the Trump-Zelensky talks planned for later that day (after the markets close) as a bearish factor, viewing the planned signing of a mineral rights deal to be a step toward a peace deal with Russia.

Further downside may have come from a softening near term demand outlook. According to the latest run of our 14 day model, demand is expected to fall below seasonal norms from 6th to 12th March, offering Northwest Europe a brief opportunity to fortify its relatively low storage levels.

This morning, despite widespread market optimism at the end of last week, the mineral rights deal was not signed after discussions at the White House broke down, likely contributing to the steep premium of 4p/therm (0.14p/kWh) that we are seeing on the new April 25 front-month contract, at time of writing.

This morning, although gas prices had initially opened at a slight premium, key contracts are currently being offered very much in line with their previous settlements, though many are yet to trade at time of writing.

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Price commentary courtesy of Crown Gas and Power