High storage and low demand helps gas prices

Gas prices continued to tumble on Tuesday amid declining demand and high storage levels.

After a bearish start to the bank holiday weekend, curve contracts continued to fall and extended Thursday’s drops, with the May 24 front-month contract falling by an additional 0.1p/kWh when compared to its previous close.

According to data from National Gas, demand fell by 8.4mcm to just 208.1mcm on Tuesday, which was a considerable 34.5mcm below the seasonal norm and likely helped to offset dwindling LNG supply.

Plentiful storage levels across continental Europe helped to amplify the bearish sentiment; according to data from Gas Infrastructure Europe aggregate storage levels are holding firm at just under 59% full, which is well above the 5-year rolling average of around 45%.

In other news, Ukraine’s latest wave of retaliatory strikes against Russia continues, with reports emerging on Tuesday that long range drones had made it 930 miles into Russia and hit an oil refinery in the Republic of Tatarstan (part of the Russian Federation).

So far, targeted attacks on Russian infrastructure have apparently reduced the nations refining capacity by as much as 14 percent in the short-term.

Prices have opened very much in line this morning, with the Winter 24 front-season contract currently being offered just 0.02p/kWh below its previous settlement, at time of writing.

The UK is currently consuming 37.77 GW’s of electricity at the time of writing (14:30 – 15:00).

Wind is currently generating 15.77 GW’s (39.95%) of the UK’s electricity with gas only having to contribute 4.85 GW’s (12.29%).

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