Last Friday at the NBP (National Balancing Point), the market experienced volatile movements ranging from 0.75p/therm (0.026p/kWh) in both directions. This is similar to the narrow trading range observed in recent weeks. These market changes are a result of higher wind power output, improved LNG supply, terminal maintenance, and fluctuating demand.
What does this mean?
Wind power output increased on Friday, averaging highs of 12GW. This significantly reduced the demand for gas for power generation, from 9.3GW on Wednesday to 4.4GW on Friday.
In other news, LNG supply has risen after a period of reduced cargoes. This has boosted confidence in British gas suppliers. National Gas indicated that LNG sendout was the highest within-session value since May 24.
The UK’s Barrow North and Cygnus field experienced technical issues on Friday. GB REMIT data shows that 9.77mcm (million cubic meters) of supply was unavailable during the gas day. Additionally, forecasts show that demand exceeded seasonal norms over the weekend and this trend is expected to continue through July due to cooler temperatures.
Summary
This Monday, the energy market has increased slightly as wind power output returns to regular levels, forcing the grid to rely more upon gas demand. The increased UK LNG supply hasn’t offset the impact of technical issues at Barrow North and Cygnus field. Finally, the Winter-24 front-season contract is currently offered around 2p/therm (0.07p/kWh) above its previous settlement.
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