Improved supply and demand outlook helps reduce prices
An improved supply and demand outlook continued to help reduce NBP gas prices on Thursday.
Bearish sentiment was most prevalent at the front-end, with the December 24 contract posting the biggest losses of the session after falling circa 2.1p/therm (0.07p/kWh) when compared to its previous close. The latest run of our 14-day model maintains that demand will hold below seasonal norms until at least 14th November, thanks in part to milder weather conditions expected over the period.
Uninterrupted flows from Norway and higher LNG send out volumes likely served as an additional source of help. Planned offline capacity in Norway was just 5.83mcm/d for Thursday’s gas-day, down from 46.70mcm just one week earlier (Gassco).
Furthermore, data from National Gas shows that LNG flows increased by around 33% when compared to the previous session which further reinforced confidence in British supplies.
News of a possible Azerbaijani-EU transit deal resurfaced on Thursday and likely contributed to a steep sell-off during afternoon trade which saw contracts shed up to 5% of their value within a matter of minutes. The market did seem to encounter resistance at these lower levels however, with prices ticking back up slightly into the close.
NBP gas prices have so far resumed their downward trajectory this morning, with the Summer 25 front-season contract currently being offered circa 2.5p/therm (0.09p/kWh) below its previous settlement, at time of writing.
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Price commentary courtesy of Crown Gas and Power 