Prices ease over strong LNG supply and increased wind generation

Gas prices changed direction on Monday as high LNG send out and stronger wind output parried Red Sea supply concerns.

Substantial losses were posted across the curve, with the February 24 front-month contract plunging 0.16p/kWh below its previous close, likely on the back of a busy LNG arrival schedule.

According to data from National Gas, LNG sendout has averaged at a rate of just over 100mcm/d across the past 5 sessions, while the latest shipping signals suggest as many as 7 laden vessels will arrive at British terminals by 28th January.

Further pressure came as windy conditions cut gas-for-power demand by 14% when compared to Friday’s gas-day.

At the same time, National Grid data showed wind turbines generated circa 11.4GW yesterday making up more than 29% of the generation stack.

In other news, several Russian and Qatari LNG vessels have diverted course from the Suez Canal in favour of the longer and more expensive Cape of Good Hope route via the southern tip of Africa.

An increasing number of shipping firms are avoiding Red Sea transit routes amid escalating tensions in the region; reports emerged on Monday that a US owned cargo ship was attacked by Houthi militants in the Gulf of Aden (south of Yemen).

NBP contracts have opened slightly lower this morning, with the Summer 24 front-season contract currently being offered circa 0.05p/kWh below its previous settlement at time of writing.

If we check the latest half hourly period at the time of writing (08:30 – 90:00), electricity demand is currently 45.34 GW’s in the UK.

Wind generation has dropped away today with just over 20% of the UK’s power being generated from on-shore and off-shore turbines at the moment.

Specifically, 20.24% (9.26 GW’s) of the UK’s total electricity is being generated from wind turbines currently with gas contributing a massive 25.40 GW’s (55.53%).

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