Gas prices corrected higher amid climbing gas demand
Gas prices at the NBP corrected higher on Wednesday amid climbing gas demand and US hurricane fears.
Considerable gains of circa 2p/therm (0.07p/kWh) were posted across the near-curve, with more muted price action observed further out as long term fundamentals remained unchanged.
A gradual increase in gas demand across the past few sessions may have fed into the bullish sentiment. According to data from National Gas, GB demand increased by around 11% when compared to the previous session.
Furthermore, our 14-day model indicates that demand will remain above seasonal norms until 16th September, coinciding with reports of milder temperatures as we move into week 38. The US Hurricane Centre has now downgraded Hurricane Francine back down to a Tropical Storm after the system weakened shortly after making landfall over Louisiana.
There have been no reports of damage to gas and oil infrastructure in the region which will come as a relief for European gas hubs due to the US’s position as the world’s largest LNG exporter.
It appears the news may have helped to calm market nerves this morning, with the Winter 24 front-season contract currently being offered circa 2p/therm (0.07p/kWh) below its previous settlement, at time of writing.
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Price commentary courtesy of Crown Gas and Power 