Gas prices rebound amid wide energy complex

Following a series of drops in the last few days gas prices rebounded on Thursday.

All contracts posted day-on-day gains amid a pressured wider energy complex and low LNG supply.

The April-24 front-month contract observed some of the largest moves, gaining over 0.9p/kWh when compared to its previous settlement.

Strengthening carbon and oil markets were likely the main reason for the increases. According to ICE data, the EUA benchmark contract saw day-on-day gains of circa €2.5/tonne all while the Brent Crude benchmark contract continued to rally, moving up by more than $1.25/barrel to reach its highest price since the 27th October 2023.

The increases come amid news of the OPEC+ bloc agreeing to an extension in their oil production cut (which is currently reducing volumes by 2 million/bpd) for the remainder of the year, adding concerns to supply security.

Tighter LNG supply also provided further pressure to contract prices. The latest shipping signals indicate that just one laden vessel is anticipated to berth on British shores before the end of the March, with no cargoes offloading since the 9th March.

This morning gas prices have continued their upwards, with the Winter-24 contract last trading circa 0.03p/kWh above its previous closing price.

Fortunately given the low demand on the UK system, the UK is currently consuming just 32.19 GW’s of electricity at the time of writing (09:30 – 10:00), helped by the mild temperatures we are witnessing at the moment.

Wind is still generating the highest proportion of electricity this morning at 15.69 GW’s (45.38%), with gas contributing 3.62 GW’s (10.48%).

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