- Market Comments January
Tuesday 2nd January 2018 - Gas prices dropped on the last day of trading in 2017 driven down by a falling spot price, a consequence of oversupply and weak demand. This morning, the system is 40mcm long a combination of a minor drop in demand coupled with increased flows from Norway and a large increase in flows across the interconnector. Very little has traded yet with prices mostly unchanged from the previous session.
Wednesday 3rd January 2018 - Gas prices started a new year of trading with a minor retreat in the UK driven down by the front end of the curve, the spot market, where an oversupply of 40mcm depressed prices. Gas prices on the continent were mostly unchanged as traders torn between falling oil prices and a rally in the coal market. This morning prices are mostly unchanged as traders eye the risk of a cool down in temperatures over the coming weekend.
Thursday 4th January 2018 - Gas prices were slightly lower yesterday, on the back of a long system and a minor retracement in coal prices. Any further sell-off was held until traders can become more confident about the weather forecasts for next week, taking into consideration the extent and duration of the cooler temperatures of any cold snap. Today, prices are slightly lower at the front end of the curve as the weather forecasts have turned a touch warmer from yesterday. Gas is also receiving some support for longer dated contracts on fresh highs in oil.
Friday 5th January 2018 - While the DA was up on NBP as we are heading into colder weather, the monthly forward contracts were down, as the cold weather seems to be short lived, and temperatures point to mild weather from end of next week in the UK. This morning we are further off as the warm up has been confirmed, and as the system is slightly long despite a significant drop in temperatures since yesterday in the UK especially.
Monday 8th January 2018 - In spite of a cold snap over the UK, the weather for Nord Western Europe looks mild for the season. This was bearish the overall European gas markets on Friday. It was the front that took the lead in the bearish market, but Brent oil was also off and a stronger pound helped the curve in the UK down as well. Coal on the other hand was a bit stronger, but the weather and oil prevented the gas market from going up. Not a lot has changed during the weekend, but weather forecasts have turned a tad colder for Europe. With the slightly colder weather, a bit of upside to the front can be expected, the last couple of weeks decreases taken into consideration.
Tuesday 9th January 2018 - Temperatures have dipped over the last couple of days both in the UK and on the Continent. Levels are currently below seasonal normal in the UK and around normal on the Continent. It’s basically the first time this winter that the market is experiencing situations with below normal temperatures and demand makes the short end of the market tighter. Despite fundamental strength in the short end players didn’t seem worried about the situation in yesterday’s session and prices ended sideways. Late yesterday an earthquake in the Groningen area was registered, this together with colder forecasts compared to yesterday makes the gas markets open stronger.
Wednesday 10th January 2018 – Yesterday was bullish for European gas markets. Weather forecasts were colder yesterday, and the news from late Monday about the Groningen earthquake continued to support the market through yesterday’s trading. Reports of a big drop in US oil inventories sent the oil to new highs. This morning gas is off with slightly warmer weather and a long system. Coal is also coming off, adding to the bearish sentiment, but it’s too early to call and end to the bull ride for coal. Oil stays strong, limiting the downside for the curve.
Thursday 11th January 2018 - Yesterday the markets opened slightly below Tuesdays close, as the weather was a bit warmer and coal was off. But around noon, NAM, the operator of Europe’s largest gas field, Groningen, issued a statement saying they would propose production cuts at the field because of the earthquake Monday, that was the largest since 2012. Gas prices shoot up on this on the whole curve. But longer dated products were up, and stayed up, closing over 1 p/th up for some seasons in the UK, and about 0.25 €/MWh for calendar products on the Continent. This morning the front is up a bit, but not higher than where we traded yesterday. The system is significantly long. The direction of the curve will be very much dependent on if or what information the market will receive today about the proposed production cuts.
Friday 12th January 2018 - NAM, the operator of the huge Groningen gas field, has suggested to the Dutch regulator, to lower gas production by around 10% without giving any further specific details. The market took this fairly calm yesterday, and with lower coal and a late slump in oil, curve contracts on the continent traded down. In the UK, a weaker pound countered the bearish coal and most contracts closed unchanged. This morning a change in weather forecasts are sending the front end of the curve on the move. It looks colder in today’s forecasts, and the American weather model points to a significant cold spell over most of Europe. The European weather model is not as bullish, but this is enough to send the European gas markets significantly up. Coal is also up this morning, but oil is coming off after having traded just above 70 $/bbl yesterday. We are currently at 69 $/bbl on front month oil.
Monday 15th January 2018 - Gas prices improved on Friday, following forecasts for a prolonged cold snap coupled with increased prices for both coal and crude. This morning, the world looks a little bit different, forecasts have moderated and the system is long 26mcm. The length is mostly due to flows from the continent across the interconnector which were priced in on Friday when traders expected colder weather. The reversal in temperatures has crushed prices this morning with the front month trading down 2p in the UK and 50 cents on the continent. Coal is trading unchanged, oil is down a touch and power is down with gas and weather.
Tuesday 16th January 2018 - Yesterday the gas market was oversupplied in the UK, this coupled with a revised forecast for more mild temperatures sent prices down, despite the minor gains in coal and oil. This morning, the system is again long by almost 30 mcm, despite increased demand and a drop in supplies from Norway, the interconnector flows to the UK have increased to 41 mcm which accounts for all of the excess gas in the system. The power markets are up on a slightly cooler weather run and it is expected that the markets will retrace some of the yesterday's losses if further forecasts confirm the cooler expectations.
Wednesday 17th January 2018 - Gas prices came under pressure yesterday, following a retracement in both the oil and coal prices and on the back of a very over supplied system. This morning, prices are being dealt lower again after weather forecasts have been revised warmer and windier for the UK. Coal prices are down as well in early trading, while oil is stable as experts predict a further draw in US stock piles this week.
Thursday 18th January 2018 - Gas prices relaxed further yesterday in both the UK and on the continent, driven down by warmer and windier forecasts coupled with a long system and dip in the price of coal. This morning, the fight continues as the back end of the 15-day forecasts has been revised warmer across Europe with NW Europe seeing the most pronounced change. Stocks are in good shape for the time of the year posting a surplus to 2017 and trending towards the 5-year average, imports from Russia have dropped back as power supplies from hydro and nuclear sources have surged and pushed gas fired generation out.
Friday 19th January 2018 - Gas prices were distributed marginally lower yesterday, on the back of mild forecasts and a comfortably supplied system. The drop may have been larger if not for a number of outages announced to the market by Norwegian firm GASSCO, the unplanned outages are expected to very short term in nature but were crucial in slowing the downward slide. This morning, prices are mostly flat to Thursday's close as some short sellers are likely taking profit after 4 days of sell-offs. The weather forecasts have been revised warmer at the back end of the 15-day outlook, while coal, carbon and power are making minor gains in early trade action.
Monday 22nd January 2018 - Prices for gas were unchanged on Friday as mild weather was expected to arrive on Monday while a number of unplanned outages cut production and supplies to Europe. The broader energy complex was mixed with crude taking losses while coal made gains and power prices were mixed. This morning, the system is short on a dip in flows from Norway to the UK and a reduction in flows from the continent. Prices are mostly unchanged in very early trade action.
Tuesday 23rd January 2018 - Gas prices retraced some of last week’s losses on Monday after a easy start. The weather forecasts came in colder around mid-day sparking a bit of a rally on the remaining months of the winter, February and March, while gains on the rest of the curve were more modest. This morning, the system is long on mild weather and an up-tick in wind power production. in the UK demand has fallen by 31 mcm while supply is down around 10 mcm. Broadly flows are very stable and the year over year volume of gas in storage is growing. Oil and coal are both up this morning as is gas and power, save for Nordic power with is a touch softer on increased precipitation.
Wednesday 24th January 2018 - Gas prices fell yesterday. Prices climbed in the morning at the front end of the curve on the morning weather forecasts, however, by midday, forecasts updates indicated temperatures may not fall below normal and the market reversed sharply. This morning, gas prices are being dealt lower in early trade action on the back of balanced system and neutral forecasts, coupled with softer oil and coal.
Thursday 25th January 2018 - Gas prices continued to move yesterday despite a rally in oil which took the commodity to new highs. The system was comfortable supplied while temperatures remained mild and wind power output robust. Additionally, power and coal were also traded lower which added to the bearish sentiment on the gas markets. This morning, the system is long on the back of increased flows across the interconnector despite a large drop in receipts from Norway which have been diverted to the continent. Prices have rebounded slightly after yesterday’s sell off as some short sellers have taken profit on the move ahead of a return to normal temperatures next week.
Friday 26th January 2018 - Gas prices were varied yesterday with the UK closing mostly unchanged while the continental markets took on some minor losses, the primary drive for the divergence in trade direction was currency with the euro strengthening against its peers, the pound and the dollar. This morning, that move, cooler forecast runs and a sharp drop in wind output have pushed up gas prices in the UK and on the continent, despite a long system. On February 1st the markets will get news on any changes in the production caps for the Dutch Groningen gas field.
Monday 29th January 2018 - Gas prices were distributed lower on Friday, with only the balance of winter months contracts, February and March, making gains day on day. Prices were softer as the mood for traders remained bearish on the back of a well-supplied market with mild weather conditions and sideways peripheral markets. This morning, the system is long as supplies have picked up after unplanned maintenance more than the expected increase in demand from cooling temperatures. Oil prices are flat from Friday, while coal and German power have kicked off the week stronger, gas is following their lead and is also stronger. The February contract is set for expiry and some support will come from short sellers buying back or rolling positions before the contract goes into delivery.
Tuesday 30th January 2018 - Yesterday prices for gas closed lower, despite starting the day in positive territory. The broader energy complex came under pressure with oil and coal taking on loses of over a dollar each, that coupled with a long system sent the gas tumbling down through the day to close in the red. This morning, gas prices are in positive territory in early trading as the forecasts have come in a touch cooler than yesterday and as traders take some profit from short positions. Oil is off slightly in early trade action while coal is mostly unchanged.
Wednesday 31st January 2018 - The gas market dropped yesterday, driven down by a long system, moderating forecasts and a softer energy complex. Weakness in coal and the sell-off that occurred was quite stunning with the price falling almost $2.25/ton on the front calendar contract. The move in coal had only a slight impact on the gas market which has been falling since the start of the new year, in fact forward winter contracts made gains yesterday in the face of the bearishness of competing fuels, speculators are likely buying ahead of the Gronening announcement on Thursday. This morning, prices have shot up as the forecasts have turned decidedly colder, with temperatures expect to drop below normal next week. The system is long for today, but will carry little weight against the change in temperatures expected. Us crude stats for this week suggest the first build in stocks this year.
- Market Comments February
Thursday 1st February 2018 - Gas prices roofed yesterday, marking a sharp blow with the downward trend that began with the start of the new year. The rally has been sparked by a forecasted drop in temperatures across Europe and the UK for the first week of February, the colder weather is also accompanied by a fall in forecasted wind which will require more gas for power generation. This morning, the system is long, as supplies from the mainland and from Norway flood the UK. The Groningen announcement is expected today and traders have been covering positions ahead of the news. Coal has lost about $4 over the last couple of days which should help to keep it competitive with gas.
Friday 2nd February 2018 - Prices for gas were dealt lower yesterday, after a rollercoaster of price movement after the Groningen announcement. The Dutch Government has recommended a cut of 50% to production with closure of some minor fields as soon as possible, the final decision will be left to the respective minister. The market rallied initially on the news selling off shortly after. Falling coal prices have lowered the fuel switching point between the competing fuels and given a bit more room to the downside. This morning, the system is stable, forecasts are slightly warmer on the continent and a touch cooler in the UK. Prices are up slightly from the close, coal is down while oil is up.
Monday 5th February 2018 - Gas prices closed last week slightly lower dropping with oil and power, despite a jump in coal and cooler forecasts. This morning, the system is long on increased flows from both Norway and the continent despite a jump in demand, attributed to cold weather and very low wind power output. Energy prices are down across the complex with power, carbon, coal and oil losing value. Energy market sentiment is being driven by a rise in forecast temperatures next week and overall bearishness in markets generally, stock markets have had their worst week since the start of the year and continue to lose ground this morning.
Tuesday 6th February 2018 - Gas prices were dealt lower yesterday, following the wider commodities and equities complex which saw oil, coal and power all trade down while stock markets globally took a beating. Additionally, a change in forecasts from below normal to rising temperatures next week compounded the bearish sentiment. This morning, the bears remain in full control as the market is seen to open further down. The system is long despite the cold weather as expectations of more mild weather have compelled storage operators to sell off stocks ahead of further spot price declines. Global equity markets have been further battered and some of this sentiment is filtering into the energy markets via oil and coal prices.
Wednesday 7th February 2018 - Gas prices made gains yesterday in the UK on the back of a weakened pound and a switch to a cooler prognosis for the 10-15-day period of the forecast. The continent was buffered from most of the move due to a stronger euro, making imported gas cheaper. This morning, the system is again long as demand begins to wane and supplies remain unchanged, wind output is also expected to increase. The market will remain very focused on changes in weather as forecasters line up with prediction for how February and March will develop.
Thursday 8th February 2018 - Gas prices were up and down yesterday after the mid-day announcement of a stop in flows on the Forties pipeline. Intraday gains of 2-3 pence/therm were seen on spot and front month prices, however later in the session an announcement was made that Ineos expected to restart the system overnight and prices were sold back down. This morning, the system is long despite the loss of flows on a drop in demand and an increase in wind output, forecasts are slightly milder today vs. yesterday, however, the change is negligible. Ineos has said in a press release that the restart will take until Friday morning, flows have risen marginally from the bottom.
Friday 9th February 2018 - Gas prices recoiled yesterday day after the bears took control of the broader energy markets dealing oil, gas, power and coal to the downside. Coal was the hardest hit losing over $3 on the day, a bearish signal for gas as the competition between the fuels for power generation heats up. This morning, the system is short as flows to the UK have been turned down with a fall in demand. A few lasting outages have also cut supplies to the UK adding to the shortfall. In early trading the market is up modestly in response to the tight spot market and a minor bounce in coal, mixed power markets and flat oil, the stock markets continue to correct from recent highs.
Monday 12th February 2018 - Gas prices went madly off in two directions on Friday with UK gas rallying while prices on the continent were distributed lower, this was on the back of a drop in value of the pound against the euro. This morning, the system is long, coal and oil have rebounded but gas is trading down slightly from Friday’s close as the commodity aligns itself with the moves of it peers from last week and on generally bearish weather forecasts.
Tuesday 13th February 2018 - Gas prices made improvements yesterday, following colder forecasts to the upside. This morning, the system is long, on the back of robust wind output and mild temperatures, it would be hard to tell this was the case as prices have roofed in early trading on a forecasted cold snap expected to begin around the end of the month and possibly continue into March. The arctic bomb has got traders covering shorts and taking longs in anticipation of a possible polar vortex and a plunge into a massive deep freeze.
Wednesday 14th February 2018 - Gas prices gathered yesterday, driven up on the back of a sharply colder weather forecast for major European capitals that would see the mercury plunge upwards of 5 degrees below normal for the time of year. This morning the system is long, weather forecasts are touch warmer and wind power output is high, as a result the spot and front end of the curves are down while longer dated contracts are more or less unchanged.
Thursday 15th February 2018 - Gas prices were slightly softer yesterday, on the back of a long system and a sell-off in spot prices. This morning, the system is long as demand drops faster than supplies into the UK and the weather warms up. Coal and oil hold on to and make further gains as stock markets continue to recover from the recent route. This morning's weather forecast runs have come in a touch warmer and the front month has sold off while the back end of the curve has found support.
Friday 16th February 2018 - Gas prices were distributed lower yesterday on mild forecast runs showing temperatures assembling closer to normals for this time of year in addition, coal traded down competing for space in the power sector. This morning, the system is long, albeit just barely, flows are mostly unchanged and demand is dropping on mild weather. However, the weather runs have gone from predicting a warm-up to above normal temperatures to predicting a drop to new lows in cold weather compared to the last few days. There is a great deal of disagreements in the forecasts and with the latest going cold, prices for gas have regained all of yesterday’s losses on the first trade. With this information, it is unlikely traders will go into the weekend holding short positions.
Monday 19th February 2018 - Gas prices assembled on Friday as traders covered short positions and took length into the weekend over concerns of a pronounced drop and prolonged period of below normal temperatures. This morning, the cold forecasts have been confirmed and the market is up over 2p/th on the spot and front month respectively. The cold weather is expected to hang around into March thus far with no return to normal forecasted during the 15-day period, leaving the market concerned this could be a repeat of the record cold snap of 2013.
Tuesday 20th February 2018 - Gas prices jumped to new highs in the spot market yesterday as the market braces for a drop into below normal temperatures later this week. Confirmation of colder than normal temperatures for the next couple weeks pushed prices up across the curve with the front month rising the most while longer dates contracts followed in sympathy. This morning, the system is quite long as demand remains high from storage operators to inject ahead of the cold snap, prices are also higher but the increases are a bit more modest when compared to the moves on Monday.
Wednesday 21st February 2018 - Gas prices continued to fall yesterday, pushed higher on forecasts and short covering as weather forecasts suggest colder temperatures for a longer period. Gains were made in the UK gas market as the cold weather is set to engulf Europe. This morning, the system is long as the NBP continues to price at a premium to the continental markets encouraging shippers to send gas to the UK. Forecasts are broadly unchanged, coal is down slightly as is oil; expectations are for a build in US stocks tomorrow. The primary drive for the markets will be weather and the stability of flows, so far today very little has changed.
Thursday 22nd February 2018 - Gas prices were increased for another day in the spot during Wednesday's session in both the UK and on the continent, by contrast curve prices were mostly flat with a few minor losses on some of the longer dated contracts. This morning, the market has had a bit of a reversal, clawing back some of yesterday's late afternoon sell-off. Gas price continue to pick up in the spot market with gains on the curve more limited in early trading action.
Friday 23rd February 2018 - Gas prices were dealt higher in the spot and on the front month yesterday as the market continues to brace for the cold weather and snow that is expected next week. Support for the market also came from a rally in coal prices which have moved up with the cooler temperatures while gains in oil from a surprise draw in US stockpiles lent sentimental support. This morning, the market continues to move higher in the front with march trading up a penny and a half in early action The forecasts are mostly unchanged from yesterday with cold temperatures and reasonable solar and wind production give the low temperatures. National grid data is unavailable this morning so we do not know if the system is long or short.
Monday 26th February 2018 - Gas prices hit new highs on Friday as the markets shook, trade action was aggressive and in large volume, Day-Ahead prices climbed in advance of the worst of the cold snap with prices in the UK climbing more than 15p/th intra-day before settling over 11p/th higher. This morning, the system is long despite declining flows through the interconnector, the oversupply comes from a step-up in off shore production, flows across the BBL and draws in medium range stocks. The weather forecasts are showing a sharp increase in temperatures for Europe over the next week.
Tuesday 27th February 2018 - Gas prices took a bit of a beating yesterday selling down over 6p/th on the Day-Ahead while on the continent prices were down around 1.5€, coal was sold down aggressively along with gas on the back of a confirmation of a return milder weather next week. This morning, the system is short as demand reaches its forecast peak during the cold snap, spot prices are up and the curve is moving in modest sympathy. Traders continue to watch the forecasts closely for a return to below normal temperatures which has been suggested by some meteorologists at the end of the 15-day outlook.
Wednesday 28th February 2018 - Gas prices recovered yesterday in the spot markets with a bit of vengeance, making gains of 12€ and 23p/th respectively. The move was driven by weather and a tight supply demand balance despite falling prices for both coal and oil. This morning, the system is a touch long, which on the face of it would seem pretty neutral.
- Market Comments March
Thursday 1st March 2018 - National Grid have issued a system deficit warning for today as there isn’t enough gas coming into the system to meet demand. Over the course of the day they will be using numerous strategies to combat the shortfall. This has resulted in high prices for today and tomorrow. Whilst this is pretty dramatic in the short-term, pricing for the rest of the curve is only slightly up reflecting the view that once the cold weather disappears all is well with the world.
Friday 2nd March 2018 - UK gas market was one for the record books yesterday, what began with a deficit warning by the National Grid ended with Within-Day gas trading at its highest level in 20 years clearing £3.50 while system balancing prices were almost £5. Temperatures have begun to warm slightly and demand is already receding, falling 26mcm from yesterday, the system is a mere 2mcm short and stocks in the UK remain half full which should help provide stability to prices at more reasonable levels. Gas prices are trading down this morning as the forecasted warm-up is confirmed into the weekend.
Monday 5th March 2018 - Gas prices gathered into the weekend as traders covered positions again in case of any bullish weather surprises or infrastructure outages over the weekend. Only spot prices came in lower but that was to be expected as temperatures had already begun to warm up. This morning, the system is 45mcm long as demand drops sharply, flows remain robust and a few LNG cargos are set to come to the UK, to replenish the decimated LNG storages.
Tuesday 6th March 2018 - Gas prices continued to fall yesterday from highs on Monday as temperatures continued to regulate as the Siberian cold recedes. Prices on the gas curves were unchanged after the day's trading ended. A reversal late in the session of both coal and oil kept gas from sliding into lower day on day. This morning, the system is again long despite a drop in flows across the interconnector and a reduction in wind power which should create a pick-up in spot demand for gas fired power. Curve prices are dealing slightly lower as warmer forecasts have been confirmed and spot prices continue to drift slightly lower.
Wednesday 7th March 2018 - Gas prices united yesterday as traders look past the 10-day forecasted warm-up to concerns that the back end of March could be colder than normal. Low temperatures coupled with low volumes in storage have pushed risk premium back into the market, add to that the news that Russia is ditching its supply deal with Ukraine and that is a powerful cocktail for the bulls. This morning, the system is long temperatures are set to warm, the back end of the forecasts look like they may be a touch below normal, coal is down and the API is reporting a large build in US crude stocks. All of this in the market is off slightly but the list of this to worry about and the volatility of the past couple weeks gives pause to big risk takers.
Thursday 8th March 2018 - Gas prices continued to sell down in the UK as temperatures warm up and demand wanes. On the curve prices held as traders remain fearful there could be another cold snap at the end of March. This morning, the system is long and forecasts are mostly unchanged. The market is up with coal and hedging interest for the summer and next winter amongst the already mentioned supply concerns.
Friday 9th March 2018 - Gas prices rallied yesterday as traders and regular buyers ran to cover short positions and build length prior to the weekend. Weather forecasts and meteorologists are warning of a cool down at the end of next week and there is a possibility of another blast of arctic cold, however the likelihood remains difficult to measure. The gas market retains only very limited flexibility in dealing with another prolonged bout of cold temperatures. This morning, the system is balanced, coal and oil are unchanged but the European gas and power markets continue to rally.
Monday 12th March 2018 - Gas prices continued to improve into the weekend as the certainty over the coming cold snap improved and gains were also made in oil and coal. This morning, the system is long a measly 5 mcm and the forecasted cool down has been confirmed in the market. The limited flexibility left in the system has meant that price remains one of the only drivers to increase supplies or slow demand. Additional supplies from LNG are too slow to come to Europe. Low storage stocks will mean flows will come only at high prices during the period of below normal temperatures.
Tuesday 13th March 2018 - Gas prices rocketed right at the start of trading yesterday marking a strong start to the week. The gains were not driven by unevenness of shortness in the system, but by hedging and speculative buying ahead of the cold snap that will take place this coming weekend and early next week. Gas prices traded higher while major rivals, coal and oil were dealt lower opening more competition between coal and gas for use in power generation. This morning, prices are up slightly as forecasts are mostly unchanged, a warm-up is evident in the forecasts, if correct the duration will be shorter than the previous blast of arctic air.
Wednesday 14th March 2018 - Gas prices fell yesterday, on the back of system length and weather forecasts showing a warm-up after the 5-day period. Today the system is again long, reductions in Norwegian production have been restored and weather forecasts have been revised warmer in the back-end of the outlook. In addition, to a retracement in gas prices, power prices are down across Europe and the UK falling on the moderating temperatures increasing wind output and a drop in coal prices in early trade action. Despite the return to normal temperatures, traders will continue to watch the weather closely until winter is over on account of very low flexibility.
Thursday 15th March 2018 - Gas prices fell yesterday as market bears regained some control from the bulls after forecasts showed this weekend's winter wonderland would be followed by a return to more normal conditions. Spot and front month were most effected by the changes in forecasts falling in the UK 7p and 3p respectively. Forecasts are unchanged from yesterday; coal and power are trading slightly lower which will put some pressure on gas.
Friday 16th March 2018 - Gas prices rallied yesterday, driven by the spot as traders picked up a bit more gas ahead of the cold snap to hit over the weekend. This morning, the market is up as traders bid up spot prices ahead of the weekend. the latest forecasts look a little cooler ate the end of the forward 15-day period, oil and coal prices are mostly unchanged while power prices across Europe and the UK are up, mostly from the front and the spot. The cold weather is expected to be coupled with good renewables generation which may take some of the sting out of the increased demand.
Monday 19th March 2018 - Gas prices repeated on Friday, despite the cold weather as the market appeared to have added a bit too much risk premium to the coming temperature event. This morning, the system has opened almost 40cm long as the fear of not having enough gas has turned into the reality of having a surplus on the coldest day of the forecast. Contracts are trading around flat to the close this morning, with only the Day-Ahead contract trading down in early action.
Tuesday 20th March 2018 - Gas markets were rather unclear for most of the day yesterday. The system was severely long on the coldest day, but signs of a new round of cold air in the beginning of April sent contradicting signals to the market. Today the possibility of another round of cold air over Europe in the beginning of April has increased, driving up the front of the gas this morning. We face the fact, that storage levels are at historical lows for this time of year, and the last thing the market needs is a cold April. That could have a severe impact on April deliveries.
Wednesday 21st March 2018 - Colder weather and a flow in both coal, oil and carbon was the ingredients in the cocktail that sent gas up yesterday. Most visible is the rebound in coal, that ended up almost 2.5 $/ton for the front cal contract. This has to be seen, though, in light of the slide coal has had since the end of Jan, where it is still down 12.5 $/ton. This morning, we spread the gains on further support from the weather and on oil staying at the level it closed at yesterday. Coal is down though, so the upside to the curve should be limited.
Thursday 22nd March 2018 - Prices for gas made a modest rebound yesterday in the forward market while the spot was dealt lower on a well supplied system. This morning, the system is again long with no imports from the continent across the interconnector as temperatures approach normal after a little cold snap. Although storages continue to be low as we move out of winter, some relief is on the horizon for the UK with 4 LNG cargos expected before the end of the month which should bolster stocks and improve flexibility.
Friday 23rd March 2018 - Yesterdays gas prices came off following a drop in prices for other energy commodities like oil and coal. This morning, the system is long, the interconnector is not needed for imports to the UK and weather forecasts are coming in slightly warmer than the previous run. The gas markets are trading a little lower in early action, coal contracts are dealing for lower prices while the power markets and carbon are already down from the open.
Monday 26th March 2018 - Gas prices came under pressure on Friday from moderating temperature forecasts and a softening demand outlook. Coal prices were also bearish on Friday, adding to sentiment on gas while carbon and oil prices moved higher. This morning, the system is long almost 20mcm, Norwegian outages have been resolved boosting exports and forecasts have been confirmed milder than those from last week. Prices continue to be under pressure in early trade action as the bears retain their dominance as winter may finally be drawing to a close.
Tuesday 27th March 2018 - Gas prices dropped in the UK and on the continent yesterday as weakness took hold of the broader energy complex, in addition to gas and power, coal and oil also traded lower with the exception to the bearish mood being carbon credits. This morning, the system is balanced and weather forecasts look to be a bit warmer putting a bit of downward pressure on prices in early trading.
Wednesday 28th March 2018 - Yesterday’s gas prices gathered with weather forecasts for the UK predicted to be a bit colder. With already very low stock levels across the UK, any shifts towards colder weather have caused fits of buying and short covering. This morning, prices are dealing slightly lower after retracing part of yesterday's aggressive price moves.
Thursday 29th March 2018 - Gas prices were softer at the close of business yesterday after making gains throughout most of the session. This morning, the system is stable, UK forecasts are a touch cooler while temperatures for the continent are mostly unchanged from the previous outlook. The gas market awaits news from the Dutch government about the production cap for Groningen and is trading up slightly with the power markets, coal and carbon. Most players should be well protected going into the Easter long weekend, so volumes will likely be thin on the day save for some volatility around the production cap announcement.
- Market Comments April
Tuesday 3rd April 2018 - Markets were closed on Monday for the Easter holiday in the UK with only marginal OTC (over the counter/bilateral trade available on the continent). Some price moves were still evident with oil trading down almost $2 on a continued rout in global stock markets. This morning, the market has shifted to 'summer' delivery with April, Q2-18 and Sum-18 contracts expiring and going into delivery. The system is balanced with a sharp drop in supplies as the interconnector has gone to zero with no flows from Belgium to the UK. Coal, carbon, power and oil are all trading lower this morning and gas is following suite, forecasts have come in warmer than Thursday.
Wednesday 4th April 2018 - The system opened balanced, but forecast are being adjusted after a cooler snap due and therefore the bulls are back buying the spot and front end curve. Additionally the European energy complex is supported by coal, power and carbon however Brent crude is broad unchanged.
Thursday 5th April 2018 - Markets were mostly unaffected by close of business yesterday, softer prices for coal and oil were offset by concerns over slightly cooler forecasts. For the first time in many months the bi-directional interconnector has flipped to exports from the UK to Belgium, a sure sign that spring is upon us. This morning, the system is modestly short, however, prices are slightly down from the spot out to the back-end of the curve, on a revised temperature forecast coupled with softer power, coal and carbon prices. Markets remain a bit sluggish as a risk-off approach from the broader equities markets seems to be influencing the commodities markets.
Friday 6th April 2018 - Gas prices dropped slightly in the UK spot market yesterday on the back of weather forecasts which have been revised warmer, the softness spilled over into May-18 contract sending it lower. By contrast, gains in coal and oil provided support the winter and subsequent seasonal and calendar contracts. This morning, demand is off substantially, outpacing the fall in supply which has left the system long by 7mcm despite exports to the continent. Weather forecasts have been revised even warmer again today which is pressuring spot prices, a strong pick-up in LNG deliveries over the next week should also weigh on prices.
Monday 9th April 2018 - Gas prices were dealt a little lower on Friday, driven down from weakness at the front of the curve while longer dated contracts like the Win-18 and Calendar contracts were supported by coal, power and carbon with only oil providing bearish sentiment. This morning, the system is short 15mcm as Norwegian flows have been diverted from the UK towards the continent. Weather forecasts have been confirmed warmer than they were expected to be on Friday. Prices are a touch softer in early trade action for the front month and Q3, while spot prices are expected to find some support.
Tuesday 10th April 2018 - Gas prices rallied yesterday, on the back of a short system which pushed the spot price up 1.5p/th in the UK and almost a euro on the continent, a rerouting of gas from the UK to the continent caused the shortfall that persisted throughout the day and was exacerbated by an unplanned field outage. Curve prices were dragged up with the spot and by $1.50 plus moves in oil and coal which were driven in part by a cyclone in Australia and by US Tariffs/Sanctions against Russia which hit metals producers, particularly aluminium, driving up prices for commodities. This morning, the dust has yet to settle, the system is long and flows from Norway and Russia have stabilized, however coal, oil and carbon are up so gas is trading modestly higher in early action.
Wednesday 11th April 2018 - A wave of Norwegian outages, planned and unplanned, coupled with rising prices for coal, oil, power and carbon boosted prices for gas and power across the UK and Europe yesterday. The relative tightness continues this morning with the UK system falling 5mcm short despite a modest up-tick in flows from Norway, exports to the continent and a minor increase in demand have pushed the deficit. Prices are mostly unchanged this morning in early trade action, weekly oil numbers are expected to show builds in crude stocks which might take some strength from the commodities rally.
Thursday 12th April 2018 - This morning, the system is slightly short again, as supplies drop slightly faster than demand as temperatures are set to warm up over the weekend for the UK. Prices are lively around the previous close in early trade action this morning, coal is off slightly and oil is mostly flat. Some relief from the upswing may come next week as temperatures in the UK rise, however low stock levels will keep markets supported for the near term.
Friday 13th April 2018 - Gas markets took a break from the bull run yesterday to hold fast, only spot prices increased which came as the result of a short system. Prices in the UK were down more than on the continent where they ended the day mostly flat, this was the result of a strong performance by the pound which appears to be breaking out from its sideways trend on the possibility of positive inflation numbers and the possibility the BOE will increase rates this year. This morning, the system has moved into markedly short territory because falling flows to the UK from the continent and a drop in LNG send out. prices have ticked up in response to the short system and a minor gain in coal prices in early trade action.
Monday 16th April 2018 - Gas prices rallied on Friday, making almost unchanging gains from May to the Winter-18 contract on the NBP, much the same was experienced on the continent. Gains came from a short system coupled with increased prices for competing feedstocks and inputs like coal, oil and carbon. This morning, the system is again short on the back of a halt in gas flows from UK offshore production, this may dissipate as the wind is expected to pick-up throughout the day which should ease gas demand from power generation. The pound is stronger again today while oil and carbon are weaker, temperatures are expected to return to normal by the end of the 15-day period. Gas is currently trading around the close from Friday.
Tuesday 17th April 2018 - UK Gas prices dropped yesterday driven by a slide in spot prices near the end of a trading session which saw gains for most of the day. The sell-off withdraws some gains made on Friday which have kept prices mostly sideways over the past few sessions. Weakness in gas was also driven by a turn in oil, despite the gains in coal which is a competing fuel to gas for power generation, carbon was basically flat. This morning, the system is finally balanced with a few mcm to spare as a strong pick-up in wind power output has pushed several gas-fired power plants out of the money to generate on the day. Weather forecasts continue to show a return to normal conditions at the end of the 15-day period with some change for below normal temperatures.
Wednesday 18th April 2018 - Gas prices repeated yesterday, driven down on the spot by a pick-up in wind and above normal temperatures. This morning, the system is slightly long on a minor up-tick in flows from Norway, renewables generation is picking up with good wind and solar in the UK today. Currently, the market is trading mostly flat to the close with the exception of the spot which is down in early trade action, both oil and coal are up slightly.
Thursday 19th April 2018 - Gas markets recovered yesterday following on the moves from coal and oil which were both up almost $2 each. This morning the system is slightly long as demand continues to wane on warm weather, an expected dip in wind output over the coming days will support spot prices, however high winds are expected to return by the weekend. Prices are up in early trading.
Friday 20th April 2018 - Increases in oil, coal and a Norwegian outage improved prices from the prompt to the end of the curve for both the NBP and continental markets. Despite the mild conditions, gas prices rose throughout the day, wind production has been very low but is expected to pick-up into the weekend which should ease some tightness in the market. This morning the system is very short, 20mcm, on a drop in flows coupled with an increase in exports to the continent, the latter will likely need to be reduced to balance the system. Coal and oil are trading flat in early trade action.
Monday 23rd April 2018 - Gas prices closed slightly lower on the spot Friday, but made modest gains across the NBP curve driven by a fall in the value of the pound against the euro, on the continent a weaker spot was met with a curve that was mostly unchanged day-on-day. This morning, the weather forecasts confirm a return to more seasonal temperatures from the much above normal weather from last week, wind production is expected to be strong today and for the next couple days while solar with extended cloud cover, spot gas prices are down while the curve is mostly unchanged in early trade action. Oil and coal prices are in a bit of a holding pattern this morning, US rig counts rose week-on-week while investor interest in the oil markets is growing on expectations of further gains in price.
Tuesday 24th April 2018 - Gas prices continued to tick higher yesterday driven by an expected drop in temperatures back to normal coupled with gains in coal and oil. This morning, the system is balanced but only just and this has pushed spot prices up, the curve is strong as well as making gains of half a penny on the front season. Continental markets are also in positive territory with minor gains from yesterday’s close. Two LNG cargos are expected to the UK before the end of the month to aid in the rebuilding of stocks, up to five will dock in France, Europe will need robust LNG deliveries coupled with already strong flows from Norway and Russia to rebuild its storages.
Wednesday 25th April 2018 - Gas prices fell yesterday with coal and oil, weakness that came from a continuation in some Libyan production, bearish stock numbers from the weekly API survey and calls from the French president to renegotiate the Iran nuclear deal to keep the US on side and to stave-off sanctions. This morning the system is short on the back of a minor up-tick in demand coupled by a drop in flows from a series of Norwegian and UK offshore production outages. The market is trading close to yesterday's close, oil is down slightly, coal has yet to trade and continental power and carbon are both dealing slightly lower.
Thursday 26th April 2018 - Gas prices had a modest reflection on Wednesday after falling on Tuesday, increases were helped by a $1 increase in coal, while oil was mostly sideways. This morning, the system is long almost 20cm on increased supplies to the UK, coupled with more wind power production which has reduced gas demand from power generation despite the cool down. Gas prices are trading close to the close from yesterday as traders look to the broader energy and equities markets for direction, coal and oil are up slightly in early trade action.
Friday 27th April 2018 - Gas prices assembled yesterday, following a bullish energy complex which saw also gains in oil, coal carbon and power. This morning, the system is again long, despite the increase in demand, due to an up-tick in supplies from Norway and from off-shore UK production. UK and continental gas are trading very close to the previous session's close, oil is down slightly while coal is up a touch. Power markets are soft for the weekend on the continent where temperatures will climb above normal while in the UK prices are mostly flat on below normal weather.
Monday 30th April 2018 - While continental gas contracts closed flat or slightly up to Thursdays close, all NBP contracts closed at a significant premium. A 1 %-point drop in the pound had a significant effect on pound denominated contracts. Apart from the currency move, coal and carbon continued to strengthen, giving some support to the gas, while oil resisted more Iranian related tensions and closed flat. Temperatures have dropped during the weekend and the system is slightly short this morning despite rising Norwegian flows. On top of the current outages in Norway, more fields and export terminals will be taken out for maintenance from tomorrow and onwards. Yearly maintenance on Norwegian infrastructure is expected to be significant until the end of June which is expected to support prices for the time being. Like on Friday, coal and carbon is up, while oil have just dropped a touch. Gas opens up in the front.
- Market Comments May
Tuesday 1st May 2018 - Colder weather in the UK and demand has risen to levels significantly above seasonal average. Instead of injection into storage gas is now being withdrawn and with the current very low storage levels this is something that supports prices. It also means that import to the Continent from the UK is at a low and weather in the UK therefore also supports prices on the Continent. There have been healthy LNG deliveries the last couple of days but it’s still not enough to make the market players relax. Generally, we are going towards a period with lower demand and storage levels are picking up but the general mood is still quite bullish and prices stay strong.
Wednesday 2nd May 2018 - Gas prices improved slightly yesterday. The weather forecasts have turned warmer and within the next few days temperatures are expected to reach levels above seasonal average. This reduces demand and restores the high injection levels needed to fill the storages before the start of next winter. Despite slightly lower prices yesterday, gas prices should be expected to stay supported during the next month.
Thursday 3rd May 2018 - There was somewhat of a sell off for gas prices in Europe yesterday. It was partly driven by a balanced system despite the beginning of maintenance in Norway, and by falling coal and carbon prices. Weather is looking mild for the coming period across all of Europe. This will give storage holders an opportunity to inject at a higher level. We need the storage situation to improve to take some risk off the market. Today, gas markets have opened slightly down again as the mild weather is confirmed, and as coal is coming further off.
Friday 4th May 2018 - Gas markets recovered during the day yesterday as oil and coal rallied in the afternoon. Gas opened slightly down yesterday as the warmer weather was confirmed and as coal opened the day further down. But in the afternoon coal turned around, driven by a bullish oil. The tension in the oil market is rising as we approach the May 12th deadline for a US revision of the lifting of sanctions against Iran. Trump has expressed his unhappiness with the agreement his predecessor made with Iran, effectively lifting sanctions on the country. If US withdraws from the agreement, new sanctions against Iran is likely, and this is likely to hit the country’s oil production. It’s a wait and see game in the oil market right now, and this also seems to be the case for gas, that will take direction from the oil market. Gas markets are flat to yesterdays close this morning.
Tuesday 8th May 2018 - Gas markets were closed yesterday in the UK for a bank holiday, a little trading was done on the continent in the OTC markets with all connections closed. This morning, the system is modestly short on an increase in demand relative to a tepid response in supplies. The US president has stated he will make a decision on the Iran nuclear deal today, at 8pm CET / 7pm GMT so markets will be closed in Europe. Short covering is expected throughout the day ahead of the announcement, gas is up slightly in early trading while coal is flat and oil is slightly down.
Wednesday 9th May 2018 - Gas prices in the UK traded to new highs before being sold down near the end of the session on a drop in the prices for both oil and coal. Late last night, President Trump announced he would not renew the sanctions waiver for Iran, thus essentially removing the US from the 6-nation nuclear deal with Iran. Oil markets rallied in the US and have held gains into this morning's European trading session. Gas, coal, power and carbon are all in confident territory at the open, the system is slightly long with healthy exports to the continental storages so spot price movements should be the least affected.
Thursday 10th May 2018 - Gas prices continued their climb yesterday, pushed higher by a rally of over $2 in oil prices which came from news that the weekly US oil data showed a 10-million-barrel draw in crude and oil products. Coupled with the US exit from the Iranian nuclear deal oil has gained more than $4 over the past 4 days. This morning, the system is short despite increasing flows to Europe from both Russia and Norway, the UK has seen an increase in weather related demand, lower wind and cooler temperatures, coupled with a drop in supplies from Norway. Markets are open in the UK, however, much of Germany and the Nordic countries have bank holidays today so trade action is limited.
Friday 11th May 2018 - Another day another increase in gas prices, the drivers remain the same, support from storage operators and a tight system from the fundamentals, while gains in the energy complex bolstered bullish sentiment. This morning, the system is almost 20mcm long which will require a step up in exports or storage injections to balance the UK. Spot prices are dealing down 1.5p/th while the curve is trading slightly down in sympathy as traders are keeping a close eye on oil and coal prices, with the former down a mere 10 cents and the latter up half a dollar. All markets are open today after yesterday's continental holiday, however, expect volumes to be lower.
Monday 14th May 2018 - Gas prices assembled on Friday, marking a new high-water mark for prices this summer. The rise in gas prices was driven by strength in the coal market and by fundamental strength in the spot market, the latter a result of another unplanned outage in Norway. This morning, the system is balanced, despite the drop in supplies increased demand and steady exports to the continent. The storage situation continues to improve, with stock levels now only 3% below levels from a year ago and very close to the bottom end of the 5-year range. Today, both oil and coal are down slightly in early trading and gas prices are offered down from the open but have yet to trade.
Tuesday 15th May 2018 - Oil and coal moved up yesterday by $1 and $2 respectively, dragging gas up with them despite starting the session down. Gas and power in Europe are price takers and be it due to oil indexation of pipeline gas or LNG or competition in the power sector the broader energy complex is driving Europe now. This morning, the system is long, demand is down and supplies from Norway are up. Stock levels continue to improve and at this pace will be higher year on year if this injection level is sustained. a retracement in gas will come from a pull back in global commodities and a return to healthy stock levels, both of which are likely to take more time.
Wednesday 16th May 2018 - Yesterday’s gas prices took a pause, ending the session unchanged for the most part on the curve and down in the spot market. This morning, the system is balanced on lower exports to the continent and an increase in supplies to the UK from both UK and Norwegian sources. Flows have been quite consistent over the past couple of days so price action will dependent on the broader energy markets, coal is up about 20 cents and oil is down much the same and carbon is flat. Gas prices are up slightly from the close in early trading action.
Thursday 17th May 2018 - Gas markets in Europe and the UK dealt lower for most of the session yesterday, save for the spot market which rallied on another unplanned outage in Norway, which pushed prices above the average price for the previous winter. This morning, oil, coal and gas are all up, oil is up on rumblings over the planned meeting with North Korea and fall out from declining stocks, gas is up on another outage for 5 days from Norway and a short-term increase in demand from a drop in temperatures while coal power and carbon are spiralling upward with the bullishness of the broader energy markets.
Friday 18th May 2018 – Bullish oil, coal and EUA’s supported gas market yesterday, and prices increased across the board. Oil surged even further yesterday, and traded as high as 80.50 $/bbl for Brent. It did drop a bit during the night on what looks like profit taking, trading around 79,50 $/bbl this morning. This morning we open slightly down, on a little drop in oil during the night.
Monday 21st May 2018 - A drop in oil and coal set the stage for a correction down in gas prices on Friday. Both coal and oil have flirted with so called ‘big figure’ levels, and have so far had difficulties in establishing above. Today most of Europe is closed due to Whit Monday so we expect low liquidity, but UK gas is coming off from the beginning of this week as the system is slightly long.
Tuesday 22nd May 2018 - Gas prices shadowed oil and coal to the upside on Monday, trading in thin volume over a continental holiday. This morning, coal and oil are up and, as a result, so is gas, driven by the curve rather than the spot which has moved up to follow, despite the UK system being in a situation of oversupply. Some of the demand should be credited to the coming Kollsnes gas processing plant which is planned to be out for one day, May 24th, cutting Norwegian processing by almost half, 145mcm/d. The bull run continues until all the real buyers, storage and industrials, are gone and the speculators cash out on their positions.
Wednesday 23rd May 2018 - Gas prices took off yesterday, out pacing the moves in oil and coal, as the European energy complex moved higher. This morning, the system has gone very long, 35mcm, despite the start of Norwegian maintenance which has dropped by almost 30mcm, rerouting volumes to the UK from the continent for pipeline works. Temperatures are expected to remain well above normal for the time of year for the rest of the 15-day outlook, while some forecasters are calling for cool temperatures at the peak of the summer in July and August. Prices are down slightly in early trading from the spot and down the curve.
Thursday 24th May 2018 - Gas prices took a break yesterday after climbing higher the day before, coal joined gas in the down turn as did oil, for most of the day before returning to positive territory near the close. This morning, the system is a mere 3mcm short as both demand and supply in the UK drop sharply. The outage in the UK's largest supplier is only planned to last for a day before it ramps back up. Prices are up this morning of the drop in supplies and a small bounce in coal and gains in carbon, oil is down.
Friday 25th May 2018 - Gas prices improved yesterday following a fall in oil and a balanced supply/demand picture in the UK and Europe despite a large drop in flows from Norway on the back of some short-term maintenance. Prices dropped across the curve from the spot to the longer dated contracts in both the UK and on the continent while the broader European energy complex sank except for carbon that apparently didn’t get an invite to the big bear jamboree. This morning, the system is slightly short on a drop-in supplies from a pick-up in exports.
Tuesday 29th May 2018 - Markets were closed yesterday in the UK and the US for the Spring bank holiday and Memorial Day respectively. This morning, the system is stable UK and Norwegian maintenances are ending and flows are ramping back up, temperatures are above normal for the balance of the 15-day outlook while wind output remains low while solar continues to pick-up. Coal, power and carbon are quite strong in early trade action while oil is only modestly positive, gas is following the European complex and is being dragged up by power.
Wednesday 30th May 2018 - Gas prices were shaken higher yesterday, driven by low output from renewable generation that forced the consumption of natural gas to fill in the shortfall. This morning, the system is modestly short in the UK on a dip in UK production coupled with a minor increase in demand, flows from both Norway and Russia have stepped up from maintenance, while coal, oil and carbon are all trading slightly down in early action.
Thursday 31st May 2018 - Gas prices assembled yesterday, driven by tension at the front of the curve, spot market, which has been the result of below normal wind power production and maintenance which has come up against steady demand for refilling storages ahead of the coming winter. This morning, the system remains short, modestly, with no wind in the forecast and low hydro reserves in NW Europe prices are up again on the spot driving the curve a touch higher, oil is flat and coal is slightly up. US oil stock numbers are out today, no other news.
- Market Comments June
Friday 1st June 2018 - Announced steel and aluminum tariffs by the US against the EU, Canada and Mexico sent ripples through the broader commodities complex, although Brent crude was only marginally down US WTI fell much harder. Demand is off more than supplies to the UK which has pushed the system slightly long, gas flows to the continent are also up. Spot prices are offered lower than the close while curve prices are a touch stronger in early trade action.
Monday 4th June 2018 - Prompt contracts saw a sharp drop on Friday, with the week-ahead contract falling 2.12p/th to 56.24p/th, despite the start of a series of planned North Sea outages. Prices were potentially readjusting after strong gains seen last week and as temperatures are forecast to remain above seasonal normal, keeping demand low. A heavy sell off was also seen in near term contracts, seemingly as the market became more at ease with European gas storage levels after heavy injections have improved stock levels. Premium still remains however, with the balance of summer contracts remaining above 55p/th and Winter-18 above 62p/th.
Tuesday 5th June 2018 - Gas prices shadowed the broader European energy complex to the upside yesterday, gaining value with coal, carbon and power which were all very strong. This morning, prices have moved up again in early trade action. The gains again come are fuelled by nervous power traders who are concerned over delays in nuclear restarts in France and fears of a repeat on the problems of the last two summers. Gas fundamentals are unchanged but buying has lifted prices with power and carbon, coal and oil are mostly flat.
Wednesday 6th June 2018 - Yesterday’s gas contracts closed down, after trading higher over the first half of the session. Late weakness in oil and then coal pulled gas and power down, and with them carbon, leading the whole European energy complex lower. This morning, the system is balanced flows are virtually unchanged, temperatures are expected to warm up into the 15-day outlook and renewables are forecast to improve modestly. Oil and coal are in positive territory after yesterday's sell-off bringing UK gas and power and continental gas up, while German and Nordic power are down.
Thursday 7th June 2018 - Yesterday’s gas markets opened up, but intra-day updates on weather forecasts pointed towards lower temperatures and more wind production over most of North-western Europe which sent markets down. Oil also traded down throughout the day, and late in the afternoon we got some bearish stats for the US oil storages. During night hours oil has corrected up again, and this morning we see a bounce in coal and EUA’s, driving the gas up this morning.
Friday 8th June 2018 - A flow in both coal and oil drove up European gas prices yesterday. On top of this, the pound weakened yesterday, adding to the bullishness on the NBP. The Dutch Economy minister said it should be possible to lower gas production from Groningen faster than previously expected. Today the market is slightly short, and we are up a bit in the prompt, while the curve seems to open unchanged as nether coal or oil is much changed since the close yesterday.
Monday 11th June 2018 - After a strong start to the day on Friday, the bears took over, and sent down gas on most contracts. The front was hit the hardest as the weather forecasts in general have turned towards more wind across Europe, and temperatures are also forecasted to drop back closer to seasonal averages by mid-month. This comes after a long period of warm weather and low wind. This morning the system is long, Norwegian flows looks good, oil is down a touch and gas contracts have also opened down.
Tuesday 12th June 2018 - Gas prices came off yesterday as all inputs were bearish from the start of the day. Oil and coal was down from the morning, and flows were solid. During the day, oil and coal traded up again, and gas also gained a bit towards the end of the day, without closing in positive territory. This morning oil is up. The system is only balanced despite strong Norwegian flows, and we see gas markets trading up from the start of the day.
Wednesday 13th June 2018 - Although the DA was weak in the UK due to the beginning of maintenance on the Interconnector, the rest of the curve was bullish yesterday. Sturdy coal was the main reason gas was lifted yesterday, but the weather also turned a bit more bullish with less wind than the day before. Carbon and oil was weak yesterday, but this didn’t filter through to the gas market. Today not much is changed in the weather, but despite Interconnector maintenance, the system is short. This is lifting the DA, and the curve is also lifted.
Thursday 14th June 2018 - The leading driver in yesterday’s session was a short system. Despite the interconnector being out for maintenance stopping export to the continent injections into storage were sufficient to make the system short from the beginning. This morning the market is long but prices seem supported. Both coal and oil rose yesterday and added additional strength the gas curves. However, oil seems caught between 75 and 80 USD/ barrel and are expected to stay within that range until OPEC’s meeting June 22ng. This could prevent the gas market from setting new highs but the underlying complex seems strong.
Friday 15th June 2018 - Yesterday’s UK Gas contracts closed down, after trading higher until late afternoon. The Euro lost around 2% of its value against the dollar and the pound strengthened versus the Euro. The weak Euro development explains the price gains of continental gas, in contrast to the weaker UK prices. This morning, the system is 7 mcm long, the Interconnector will be offline for another 12 days, temperatures are expected to stay above normal until the last week in June and renewables generation in the UK are forecast to improve modestly compared to last week. Oil and continental gas are unchanged this morning; UK gas is up this morning and German power is trading higher than yesterday’s close due to a worsened wind forecast.
Monday 18th June 2018 - Gas prices were rising significantly last week during the first three trading days of the week. The gas market takes a lot of input from the oil market and falling oil prices were the main reason for gas correcting down the last days of last week. Rumours says that Saudi Arabia and Russia will mention increasing oil production with 750,000 barrels a day at the upcoming OPEC meeting. These assumptions have been powerful enough to make the oil prices come off and gas has followed. It’s important to bear in mind that gas storage levels are still low and we are in the middle of the maintenance period. This together with few LNG ships in the horizon is expected to keep the gas markets well supported.
Tuesday 19th June 2018 - Prices have generally come off the highs from late May but are still elevated. Shaving all the nervousness away it’s clear that the underlying sentiment in the fuel complex is strong. This combined with low storage levels and strong Asian demand for LNG creates well supported gas markets. It does seem a bit like several fuels are struggling to get higher but expecting markets to turn bearish now is difficult to believe in.
Wednesday 20th June 2018 - Gas prices came off yesterday. Dropping oil prices were the main driver behind the move down but prices were only neutralising the gains from two days ago. The market is still characterized by high volatility and prices being stuck in a broad but neutral range. We have previously mentioned that with gas storage levels being so low the power sectors demand for gas will be of particular importance this summer. With the latest statement of delayed upstart of several Belgian nuclear plants and weather prognosis expecting lower wind than normal the power sectors demand for gas is definitely expected to be on the high side.
Thursday 21st June 2018 - Gas prices withdrew yesterday afternoon, after a modest rally in the first half of the session. Weakness in coal, power and eventually oil signalled it was time for gas to follow the complex lower. This morning, the system is again modestly long, with temperatures to cool into the weekend before climbing back above normal into the coming week. All eyes are on OPEC for its meeting on the 22nd of June and any more statements that could outline the size of a possible supply increase.
Friday 22nd June 2018 - Prices for gas were down during the day yesterday following losses in both coal and oil, but staged a late session reflection in both the UK and on the continent on a bit of profit taking after the previous day’s decline. This morning, prices are up slightly with oil and coal as uncertainty remains over the OPEC meeting and any further supply increases. Wind is strong today but set to fade into the weekend, while temperatures are expected to increase over the weekend to well above normal again.
Monday 25th June 2018 - Gas prices crept up to the close of business on Friday, following on a two and a half dollar move in Brent crude as the market was a bit disanointed in the communique following the OPEC meeting. This morning, the system is stable, flows from Norway have come off slightly on an unplanned outage and the interconnector remains out until Wednesday. Gas prices are down in early trading as oil has reversed direction from Friday. Coal, carbon and power prices in Germany and the UK are also dealing lower which adds to the bearish tone for gas.
Tuesday 26th June 2018 - Prices for gas were mostly down yesterday, from the spot to the winter 2018 contract on the NBP while longer dated contracts made some minor gains. Oversupply joined with a return to more mild conditions pressured the front of the curve while a bump in coal supported the back-end. This morning, the system is long as demand falls faster than supplies can be re-routed, gas prices are down with coal and power while oil is up slightly from the close. A sharp drop in carbon this morning is making coal fired power cheaper which is weighing on the price of natural gas.
Wednesday 27th June 2018 - Gas prices dropped yesterday falling on an oversupplied spot market and a weak prompt while the back-end of the curve retained some support from coal and oil. This morning, the system is short on a dip in flows from Norway and some unplanned outages. Oil and coal have made minor increases this morning as well, pushing gas prices up further.
Thursday 28th June 2018 - Gas prices united yesterday, driven by yet further strength in coal and oil prices, the latter was pushed higher after stock numbers from the US showed a bigger draw than estimated. This morning, the system is long, oil and coal are offered lower than the previous close, albeit just slightly, and gas is offered at the closing price from yesterday. Continued above normal temperatures and robust solar power production are expected over the 15-day period, a forecast for stronger wind in the UK should help to ease gas demand into the weekend.
Friday 29th June 2018 - Gas prices were steady yesterday, with only a minor dip in the spot market, while longer dated contracts made some gains on the back of oil. This morning, the exports across the interconnector continue to ramp up but the system remains balanced in the UK spot prices have come off but the curve is essentially unchanged. The forecasts continue to show above normal temperatures out to the end of the 15-day period, low hydro stocks in the north of Europe, low wind and high solar.
- Market Comments July
Monday 2nd July 2018 - Gas prices made increases on Friday as coal and oil rallied late in the session. The back end of the curve rallied, while the spot, front month and balance of summer came off slightly. This morning, the system is slightly long despite a ramp up in exports from the UK to the continent across the Interconnector. Coal prices are up this morning while oil is down slightly, in early trading, gas prices are mostly flat to the previous close.
Tuesday 3rd July 2018 - Gas prices assembled yesterday, making larger increases than most of the commodity complex. Coal and power were also up yesterday, with only Nordic power making bigger gains than gas. The UK market was particularly strong despite more modest movement on the continent. This morning, the oil and coal are up, power is mostly sideways and gas is bid on from the close of business yesterday. The system is slightly short as demand picks up slightly with a drop-off in wind power production.
Wednesday 4th July 2018 - Gas prices were varied in trade action yesterday, as rising coal and a short system provided lift to gas contracts whilst a dip in oil prices was viewed as bearish. This morning, the system is long over 10mcm, despite very strong exports to the continent across the interconnector and low power production from wind. Gas prices rise in early trading.
Thursday 5th July 2018 - Gas prices were mainly unchanged yesterday across Europe, as coal and oil made minor increases despite a long system and moderating forecasts. This morning, the system is 20mcm long even as exports from the UK remain elevated and wind power output collapses and is replaced with gas. Estimates are that US crude oil stocks fell for a 7th straight week last week by 4.5million barrels if so the market could continue to find some support. Gas prices are down slightly in early action with oil and coal.
Friday 6th July 2018 - Gas prices dropped yesterday morning at the start of the session, before ascending throughout the day to close in positive territory. Oil and coal also moved higher throughout the day before making a very late reversal after the oil numbers were released by the US Department of Energy showing a million-barrel build against forecasts of a 5-million-barrel draw. This morning, the system is 10mcm long, coal and oil are down slightly and gas is also down a touch in early action.
Monday 9th July 2018 - On Friday, the markets came off late in the session dipping a little in the UK following modest retracements in coal and oil. This morning, the system is balanced in the UK, the forecast remains stable for above normal temperatures and below normal wind production; exports to the continent are flat to last week at around 50mcm. Across the commodity complex today, oil and coal prices are up which are providing the lift this morning to both gas and power markets across Europe and the UK.
Tuesday 10th July 2018 - Gas prices improved yesterday driven to fresh highs on the back of an almost $2 per tonne move in the price of coal and a $1 move in the price of crude. This morning, the system is long and imports from Russia, via Ukraine have increased, the latter is likely due to a shift away from flows on Nordstream before maintenance. Coal and oil are up in early trade action, gas and power have followed, only the NBP spot is trading down.
Wednesday 11th July 2018 - Gas prices dropped at the end of yesterday’s session in the UK as weakening spot prices applied pressure to the front end of the curve while some minor strength in oil, coal and carbon helped to hold support on the longer dated seasonal products. This morning, markets are down in Asia and in commodities iron ore is leading the way down, the system is long, oil and coal are softer and gas and power are trading lower in early action.
Thursday 12th July 2018 - Gas prices were mixed yesterday, dropping early in the session on oil and gathering after a surprise draw in US stocks of 12 Million barrels was reported then plummeting into the close. This morning, the system is again long despite a minor dip in flows from Norway and increased exports to the continent. Coal and oil prices remain down further in early trade action and weather forecasts continue to show above normal temperature and solar and below normal wind and hydro production.
Friday 13th July 2018 - Losses were showing in the UK and on the continent and were given further downhill pressure from a substantial retracement in coal prices. This morning, a modest rebound in European energy prices is evident across all commodities save for coal and oil which are down modestly in early action. The system is balanced on a drop in supplies, strong exports and low wind power production.
Monday 16th July 2018 - Gas prices recovered into the weekend after traders took profit on short positions and oil rebounded to help give a lift. This morning, the system is long, weather forecasts remain above normal and renewables generation continues to struggle below normal for the time of year. In early trade action coal and oil are mostly flat to the previous close, power and carbon are up and gas is trading sideways in very thin capacity.
Tuesday 17th July 2018 - Gas prices slipped yesterday, despite resisting throughout most of the session. A massive drop in coal and oil prices of $2 and $3.50 respectively, was too much for the market to shrug off. This morning, the system is slightly long, flows from Russia are dropping as planned maintenance on Nordstream cuts supply to Europe. Coal and oil prices remain soft trading slightly down from yesterday’s close, gas prices are off slightly as well with only some power contracts making day on day increases.
Wednesday 18th July 2018 - Gas prices were only a little changed yesterday, despite softer coal prices, support to the market came from a minor up-tick in oil and a drop in flows from Russia's Nordstream maintenance. Prices have moved slightly with power because continued hot dry conditions and poor renewables generation.
Thursday 19th July 2018 - The gas market is boosted by further deterioration in the value of the pound against the euro, a massive jump in coal prices and a tighter supply picture with a drop in flows across the Nordstream Pipeline.
Friday 20th July 2018 - Gas prices made slight increases yesterday, despite a drop in both coal and oil. This morning, the system is long, exports are up and imports from Norway have also increased. Coal is down in early trading, while oil is up marginally, consequently gas prices are marginally higher on the curve while the spot is dealing slightly down day-on-day.
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