Potential new gas deal helps ease wholesale prices

News of a potential Azeri transit deal continued to help ease gas prices at the NBP on Friday.

Substantial losses were posted across the curve, with the front-month and front-season contracts each diving by more than 4.5p/therm (0.15p/kWh) when compared to the previous close.

Reports emerged late Thursday afternoon that buyers in Hungary and Slovakia were nearing an agreement that would see Azeri gas flowed via the existing Ukrainian transit route after the similar arrangement with Russia expires at the end of this year. It should be noted however that Ukrainian grid operator GTSOU has repeatedly denied any involvement in the talks so its unclear what will come of the current negotiations.

In other news, UK operator Shell has announced the discovery of substantial ‘high quality’ gas reserves in the southern North Sea at the Selene Prospect which could help to support falling UK gas production.

This morning, gas prices have opened at a slight premium as the market struggles to establish a clear direction. The Summer 25 front-season contract is currently being offered circa 2p/therm (0.07p/kWh) above its previous settlement at the time of writing.

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Price commentary courtesy of Crown Gas and Power