Gas prices reduce again as demand drops

Gas prices continued their downward trajectory on Wednesday, pressured by unseasonably low demand and bearish moves across carbon and coal markets.

The biggest moves were posted at the front-end with the May 24 front-month contract shedding an additional 0.05p/kWh when compared to its previous close.

Forecasts of below average demand remained a prime driving force. The latest run of our 14-day demand forecast model shows below average demand is expected until at least 17th April, thanks in part to the unseasonably mild and windy weather conditions we are currently seeing.

Contracts further out may have traced weakness within the wider energy complex; data from ICE shows that the Carbon EUA and Rotterdam Coal benchmark contracts saw day-on-day losses of 2.2% and 3.3% respectively.

In other news, the Biden administration has rejected a proposal from Republican House Speaker Mike Johnson that sought to lift the pause on new LNG projects. The proposal suggested that any profits from new terminals could be directed towards providing financial aid for Ukraine.

This morning, although prices were initially being seen at circa 0.034p/kWh above their previous settlements, most are now being seen very much line when compared to yesterdays close.

The UK is currently consuming 34.74 GW’s of electricity (11:30 – 12:00).

Wind is currently generating 6.62 GW’s (17.82%) of the UK’s electricity with gas having to contribute 10.85 GW’s (29.22%) at the time of writing.

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