Plentiful storage levels further ease gas prices
Plentiful storage levels further eased wholesale gas prices on Tuesday.
Small losses of circa 0.034p/kWh were observed across the majority of contracts, outweighing geopolitical instability in the Middle East.
An anticipated drop in demand likely helped; according to our 14-day demand forecast, gas demand is set to plunge below seasonal norms from 22nd January- coinciding with forecasts of warmer and windier conditions across week 4 (data from Met Office).
On the storage front, data from Gas Infrastructure Europe shows that EU reserves now stand at around 78.6% of capacity, which is a remarkable 9.5% above the 5-year rolling average for the same date.
In other news, Norway’s Ministry of Petroleum and Energy has awarded 62 gas licenses (up from 47 last year) allowing for exploration in close vicinity of existing fields across the NCS (Norwegian Continental Shelf). Norway is now the largest exporter of natural gas to European markets and has been key to replacing supplies that were lost following Russia’s invasion of Ukraine and the loss of once critical Nord Stream pipeline.
Prices continue to ease this morning with front-month and front-season contracts each currently being offered 0.05p/kWh below their previous settlement at time of writing.
If we check the latest half hourly period at the time of writing (08:30 – 09:00), electricity demand is currently 41.87 GW’s in the UK.
Wind generation has dropped again today with just over 12% of the UK’s power being generated from on-shore and off-shore turbines at the moment.
Specifically, 12.27% (5.37 GW’s) of the UK’s total electricity is being generated from wind turbines currently with gas contributing a massive 25.86 GW’s (59.14%).
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