Cold temperatures increases demand and forces prices up

A firm demand outlook combined with swiftly depleting European storage to increase NBP gas prices on Wednesday.

The March 25 front-month contract opted to rebound on Wednesday, shifting a substantial circa 3.75p/therm (0.13p/kWh) higher day-on-day and reversing similarly sized losses from the previous session.

According to the latest run of our 14 day model, demand is now expected to rise above average from Friday 7th February, holding above seasonal norms until at least 19th February.

Forecasts earlier this week had indicated that demand would begin to rise steadily from Wednesday 6th, suggesting that this week has actually been slightly milder than was initially expected.

On the storage front, as of 4th February aggregated EU reserves stood at 51.3%.

This is well below last years levels (68.82%) and the 5 year average for that date (72.85%) as relatively high prices and tight supply margins continue to discourage injections.

This morning, gas prices have so far resumed their upward trajectory, with the Summer 25 front-season contract currently being offered circa 3p/therm (0.1p/kWh) higher when compared to its previous settlement at time of writing.

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Price commentary courtesy of Crown Gas and Power