Last Friday, gas prices dropped at the NBP (National Balancing Point). This was caused by Norwegian gas flows returning to normal and the high storage levels seen across Europe. The July-24 front-month contract has decreased by over 1p/therm (0.03p/kWh), compared with its previous close.
What does this mean?
The rise in Norwegian gas flows was a significant factor in the energy market retreating. The increase is a result of the completion of unplanned maintenance at the Nyhamna and Sleipner facilities. Data from Gassco showed that gas nominations through the Langeled pipeline into Easington increased massively by 34.5 mcm (million cubic meters) per day compared to the previous gas day. Being one of the longest subsea pipelines in the world, the Langeled pipeline has a crucial role in transferring Norwegian gas to the UK.
Another important factor impacting gas prices was the ample European gas storage levels. Data from Gas Infrastructure Europe indicates that storage levels are currently around 72% full in Europe. This is almost 10% higher than the five-year average. With supply higher than usual, the situation pressured the increasing gas prices.
Summary
The factors that have led to the market declining are the Norwegian flows returning to normal after maintenance, and fuller storage levels seen across Europe. This Monday, gas prices continued with the bearish sentiment at the NBP (National Balancing Point), with the Winter-24 contract trading around 1.5p/therm (0.05p/kWh) below its previous settlement.
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