Gas prices surge amid tight Norwegian supply
Gas prices surged on Tuesday, amid tight Norwegian supply and continued geopolitical tensions in the Middle East.
The biggest moves were once again observed at the front-end, with the May 24 front-month contract closing almost 0.2p/kWh above its previous close.
Norwegian supply curtailments continued to serve as a key source of increases, with unplanned maintenance at the Nyhamna and Dvalin assets taking a total of 64.8mcm offline across the gas-day (data from offshore operator Gassco).
Uncertainty stemming from a tense standoff between Israel and Iran also created further increases. The Q1 ’25 contract breached the 100p/therm (3.4p/kWh) psychological level and erased practically all of the cumulative losses enjoyed so far this year. It’s currently unclear if Israel will take retaliatory action after Iran launched a massive missile barrage on Saturday, and the intensity with which Israel may choose to respond.
Further issues likely emerged from upward revisions to demand forecasts. According to the latest run of our 14-day demand model, British demand will average firmly above seasonal norms until at least 30th April.
Most contracts however have traded around 0.1p/kWh below their previous settlements at time of writing perhaps helped by the windy conditions buffeting UK shores at the moment.
The UK is currently consuming 34.92 GW’s of electricity (12:00 – 12:30).
Wind is currently generating 11.56 GW’s (30.96%) of the UK’s electricity with gas only having to contribute 3.74 GW’s (10.02%) at the time of writing.
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