Gas prices ease despite LNG supply concerns

Gas prices continued to lose value on Thursday, amid muted demand and despite plummeting LNG supply.

Relatively small losses of just under 0.34p/kWh were posted across the near-curve, with high storage levels and below average demand helping to reinforce confidence as we approach the front-summer delivery period.

According to data from National Gas, actual demand for Great Britain totalled 236.8mcm across Thursdays gas-day. This was 7% lower than the previous day and 33.7mcm below the seasonal norm, which could perhaps be attributed to a substantial uptick in wind-power generation across the same period.

It wasn’t all plain sailing however, a sharp drop in LNG supply observed over the past couple of weeks continues to squeeze supplies. National Gas data shows that LNG send out flows (within session) fell to just over 15mcm yesterday, this is the lowest level seen so far this year with increasing demand for the fuel in Asia is resulting in vessels diverting away from the European market.

In other news, a representative from the US Department of Energy has indicated that the Biden administrations’ pause on new LNG export licenses could take longer than initially suggested and is likely to last several months.

NBP prices have drifted even lower this morning, with the Summer 24 front-season contract currently being offered circa 0.034p/kWh below its previous settlement, at time of writing.

In terms of UK’s current electricity demand, if we check the latest half hourly period at the time of writing (13:30 – 14:00), electricity demand is currently 36.25 GW’s in the UK.

In terms of the generation mix, gas is currently only having to generate 2.88 GW’s (7.45%) of the UK’s electricity. Wind power is generating a massive 19.10 GW’s (49.40%) of the UK’s total electricity this afternoon.

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