Mild temperatures reduce gas prices

Gas prices continued to fall on Tuesday, helped by low demand and milder temperatures.

The majority of contracts posted small losses, with key contracts shedding around 0.03p/kWh when compared to their previous closing price.

Unseasonably low gas demand once again acted as the prime source of pressure with data from National Gas showing actual demand was around 44mcm/day below seasonal averages on Tuesday, a drop of more than 15% when compared to the previous session!

Additionally, our revised 14-day demand forecast model shows demand is now anticipated to remain below seasonal norms for the remainder of week-11 and throughout week-12 as milder temperatures are expected to linger over the next 2 weeks.

However, a bleak LNG outlook perhaps limited any further losses being made. Latest shipping signals indicate that just two laden vessels could arrive at British terminals before the end of the month.

This morning gas prices have opened relatively in line with their previous settlement, however many contracts are yet to trade at time of writing.

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