Ongoing supply concerns drives wholesale prices up

NBP gas prices resumed their upward trajectory on Monday amid Russia-EU supply concerns and bullish demand fundamentals.

The biggest moves were once again observed at the front end, with the December 24 front-month contract surging circa 4.5p/therm (0.16p/kWh) higher when compared to its previous close in response to an ever evolving near-term outlook.

According to data from operator Humbly Grove REMIT, at least 7mcm of withdrawal capacity was removed at the Alton, East Hampshire based storage facility due to planned maintenance that is not expected to be resolved until Thursday evening. Reflecting the tight supply picture, the BBL Interconnector engaged flows in the forward direction (Netherlands-Great Britain) at a rate of 1.4mcm across the session. The British system operator, National Gas, recently issued a winter outlook indicating that exports from the EU could increase as we move deeper into the winter supply season.

In other news, Ukrainian President Volodymyr Zelensky claimed on Monday that Russia had deployed nearly 50,000 troops in the Ukraine-occupied Kursk region. European gas hubs are closely monitoring these developments because the Sudzha nomination point is responsible for the last remaining Russia-EU exports via the Ukraine. The possibility of heavy shelling, as seen earlier this year during the Ukrainian counteroffensive, could pose a serious risk to the security of these supplies.

This morning, gas prices have opened in negative territory, with the Summer 25 front-season contract currently being offered circa 1.5p/therm (0.05p/kWh) below its previous settlement, at time of writing.

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Price commentary courtesy of Crown Gas and Power