Warm weather and increased gas supply helps wholesale prices
Gas prices edged lower on Thursday with small, incremental reductions of circa 1p/therm (0.034p/kWh) being reported amid easing demand and recovering Norwegian supply.
The 14-day model has been adjusted slightly to show that demand will drop well below seasonal norms today. Demand is expected to briefly rise back in line with averages on 16th and 17th April but will still average below typical levels from now until at least 24th April.
This is due in part to mild temperatures and stronger wind, which could encourage storage injections across Northwest Europe.
The end of the first round of Norwegian summertime maintenance has likely served as a key source of help at the front end of the curve. Data from operator Gassco shows that flow nominations into Britain’s Easington terminal reached a rate of 62mcm on Thursday’s gas-day, up from 45.9mcm the day prior and from just 15.2mcm on 3rd April.
Offline capacity is expected to be minimal from now until later this month and into May, with this year’s peak expected at 183.28mcm on 21st May. This next phase of planned works is likely already factored into wholesale prices but risks of delay and additional unplanned works remain.
In other news, after removing tariffs of more than 10% on the majority of affected countries, the US has seemingly doubled down on China. After increasing their bespoke tariff from 104% to 125% on Wednesday, the US announced another hike yesterday this time to 145%.
China has so far reciprocated the tariffs up to 125% and appears determined to retaliate further, depending on how the situation evolves.
This may be stoking fears of a prolonged trade war between the world’s two largest economies. Such a trade war could have widespread, unforeseeable effects on the global energy supply and demand dynamic due to the potential for significant changes to current global economic norms.
The NBP is holding relatively steady this morning, with the majority of contracts being offered not too far from their previous settlements at time of writing.
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Price commentary courtesy of Crown Gas and Power 