Demand in Europe has weakened after a period of milder temperatures than those seen in recent weeks. However, tighter supply will continue to support day-ahead prices. The NBP day-ahead was around 55 p/th on Tuesday, a recovery from the low of 51 p/th seen last week. Mild temperatures have dominated much of the country in recent days, putting pressure on prices. However, supply-side issues have boosted the NBP day-ahead and are expected to continue to do so over the coming days.
Outages have hit flows from the Elgin B and West Franklin platforms, and an unplanned outage at the Hornsea storage facility is expected to reduce withdrawals until the end of the week. Additionally, the reductions in withdrawal capacity at the Rough storage facility have now been extended, which will limit the withdrawal capacity until the end of February. Storage levels are also low. The UK’s storage sites are around 32% full compared with 50% at the start of January. European hub prices will also be supported by reduced flows from Russia. Gazprom’s access to capacity on the OPAL pipeline has been reduced, and at present the company is not increasing flows via Ukraine.
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