European natural gas prices continue to drop, hitting almost a 22-month low, as predictions of a surge in wind power production contribute to an already tepid demand projection.
In the coming days, and early next week, the UK’s wind energy output is anticipated to rise following a downturn that has recently supported British immediate gas prices.
The expanding number of wind farms in the UK and across Europe has already contributed to a decrease in gas usage.
This year, European gas prices have plummeted by more than half, due to factors such as an influx of liquified natural gas (LNG) imports, abundant fuel reserves following a mild winter, and relatively low demand in competing Asian markets.
However, the potential for unusual heatwaves and droughts this summer poses a significant short-term risk, with traders keeping a keen eye on weather predictions.
UK wind power generation was relatively low early today — accounting for about 2.5% of total power generation, compared to 68% from gas, according to grid data. However, a recovery is expected in the upcoming days.
Britain experienced a notably windy winter, with wind power generation in the first quarter surpassing gas-fired power station output for the first time ever, as per Drax Electric Insights.
The Dutch front-month gas, the European standard, dipped 0.6% to below €35 per megawatt-hour. The UK’s comparable contract declined by 0.8%.
