Surging wind output helps reduce wholesale prices
Surging wind output and ample European storage combined to drive down gas prices at the NBP on Tuesday.
A strong sell-off across afternoon trade managed to reverse some of the recent gains attributed to geopolitical tensions, with the Winter 24 front-season contract plunging by circa 4.8p/therm (0.16p/kWh) when compared to its previous close.
Strengthening wind output over the past few sessions may have served as a key source of help; data from National Grid shows that wind turbine generation averaged 13.5GW across Tuesday which highlights a sharp increase of almost 96% when compared to Friday (6.9GW). This subsequently eased gas-fired power demand, which declined 44% across the same period.
On the storage front, the latest data from Gas Infrastructure Europe shows that aggregated EU storage levels surpassed 90% on 19th August which is more than 2 months ahead of the 1st November target. This is just behind last years pace when stocks reached this level by 16th August and above average storage reserves should help to provide some level of reassurance as Europe moves towards another uptick in planned maintenance from its largest exporter Norway.
This morning, natural gas prices have opened in positive territory with the September 24 front-month contract currently being offered circa 1.5p/therm (0.05p/kWh) above its previous settlement at time of writing- though it should be noted that the market has so far managed to retain the majority of yesterday’s sharp losses.
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Price commentary courtesy of Crown Gas and Power 