- Market Comments January
Tuesday 3rd January 2017 - This morning, UK Gas prices have decreased following the Christmas break. The main driver this morning has been weather changes, pushing prices down. The UK system is also very long this morning, adding weight to the curve across the board.
Wednesday 4th January 2017 - This morning, UK Gas prices have increased. The main drivers for this morning are, correction from yesterday’s losses following the Christmas break, and the fact that Rough storage was due to come back online today (been offline since 28Th Dec), however it is now set to undergo maintenance ending tomorrow. Also supporting prices today, are rising Oil prices following Saudi Arabia’s plan to start its cuts.
Thursday 5th January 2017 - This morning, UK Gas has increased. The main driver this morning, is that Rough is now scheduled to be out until the 13th December (originally outage only until midday yesterday). The front end of the curve has seen higher rises, as we have been experiencing cold weather for the last couple of days.
Friday 6th January 2017 - UK Gas prices this morning have risen, as new forecasts have revealed that week 3 of January may now be below seasonal normal temperatures due to unsettled pressure ion the atmosphere, rather than the mild temperatures initially expected. This in turn is increasing heating demand and adding support to prices.
Monday 9th January 2017 - This morning, UK Gas has risen across the board. The main drivers for this morning are changing weather forecasts, as we are now seeing much colder weather for the next 2 weeks and weakening Sterling (lowest levels against the dollar seen for 2 months) following Theresa Mays interview which has caused fear for a harder Brexit.
Tuesday 10th January 2017 - UK Gas this morning has risen across the board, as weather and currency pressures combine. Weather runs are colder again this morning as we can see around 2 weeks below seasonal normal, and very strong cold signals on the continent. This is pushing demand up and in turn increasing prices. The Pound is also weakening against the Euro, as this happens it encourages more people to buy on the NBP market as it is cheaper and in turn pushes prices up. These 2 things together are causing the rising volatility on today’s market.
Wednesday 11th January 2017 - This morning, the UK curve has again risen. Milder weather is showing for next week, however the cold spell is now set to last into week 4 of January; increasing demand forecasts. Other factors supporting todays curve are continually rising Coal prices and the Euros sustained strength against the Pound causing lots of NBP buying interest and pushing prices upwards.
Thursday 12th January 2017 - NBP prices have risen again this morning, as cold temperature outlooks continue to lift the front end of the curve. Also providing support were rising Oil prices due to a weaker dollar and news that Saudi Arabia had cut exports to Asia. The dollar began to depreciate following the US President Elect Donald Trump’s news conference yesterday.
Friday 13th January 2017 - This morning, UK Gas has taken a different turn, and is posting losses across the curve. More so on the front end, as we are seeing warmer weather in the forecasts for next week, which will soften demand. Possibly limiting losses is the fact that Rough storage was due to come back online today, but the outage has now been extended to 1st February.
Monday 16th January 2017 - This morning, UK prices have dropped. This is following milder weather revisions for the next 2 weeks, resulting in drops in demand forecasts. There have also been drops in Oil prices, which have caused some impact towards the back end of the curve.
Tuesday 17th January 2017 - UK Gas prices have risen across the curve this morning. The main drivers for today are cooler weather forecasts for the coming week, and increased Oil prices. Oil is rising this morning following Saudi Arabia’s comment that their commitment to output remains unchanged. Chillier weather along with a short UK system, are increasing UK demand and pushing prices up.
Wednesday 18th January 2017 - Yesterday, UK prices dropped following the impact Theresa May’s speech had on the pound (rising 2% against the Euro). This morning however, prices have risen again as there has been a colder revision on weather overnight. We are also seeing a really bullish trend for Coal.
Thursday 19th January 2017 - UK Gas prices have risen this morning. Colder weather is expected into next week, which is again increasing demand forecasts and adding support to prices. Strong demand is increasing withdrawals and creating bullish sentiment. Oil is also adding pressure today, as it rises with nerves around today’s release of inventory stock data.
Friday 20th January 2017 - UK Gas has risen this morning as we continue to receive cold weather forecasts for the UK, now into the start of February. Also adding support to upwards movements are the 2 new outages which struck Rough storage facility yesterday, reducing withdrawals and impacting supply.
Monday 23rd January 2017 - The NBP curve found strength on Friday especially at the prompt as weather forecasts were revised downwards, likely to increase Gas demand into this week. European temperatures are set to remain well below seasonal normal which reduces the supply available to the UK as these countries compete to meet their demand. There have been further weather revisions on Monday morning, leading to a strong opening to the week.
Tuesday 24th January 2017 - Prices were bullish during Monday’s trading as Gas demand was significantly lifted on colder weather forecasts. After and brief downturn in prices first thing, prices steadily climbed throughout the day on the back of colder weather forecasts predicting a cold February, with front month climbing over 1p/therm. UK demand was around 20% above January’s average highlighting the need for Gas in the UK. Excessively cold temperatures in Europe and low wind levels in Germany combined with Coal prices climbing also helped to support prices as Gas in Europe was in hot demand. Warmer weather has moved into models this morning, pressuring the curve with a softer open but eyes will be on the Supreme Court ruling surrounding Brexit and Article 50.
Wednesday 25th January 2017 - Weather revisions continue to remain one of, if not the biggest driver of UK gas prices at the moment. On Tuesday, warmer weather revisions provided the market with relief, with prices generally decreasing throughout the day. Demand for the rest of the week is likely to reduce helping to ease prompt and near curve prices. UK Gas prices were further pressured by a cheaper Coal price, which discourages the burning of Gas to generate electricity as it becomes less profitable. Weather again weighed in to the gas prices on Wednesday as further upward revisions in upcoming temperatures have been made.
Thursday 26th January 2017 - This morning, UK Gas prices have dropped. This is following a long UK system and milder weather forecasts for February, both pulling prices downwards. Further out on the curve, pressure is caused by a rising Pound.
Friday 27th January 2017 - Again this morning UK has opened up with lower prices following milder weather runs for February (dropped 1ppt this morning). Bearish sentiment is impacting the full curve, as the UK receives strong Norwegian imports and some send out from Dragon LNG terminal - which is relieving the systems reliance on the Interconnector.
Monday 30th January 2017 - This morning, UK prices have risen across the curve. This is following colder weather forecasts for next week and supply disruption at Bacton Seal. Colder weather forecasts are set to increase heating demand, whilst Bacton Seal is limiting supply, in turn pushing UK prices up. Juxtaposing news, which could possibly limit rises, is that Oil is down over the weekend; following signs of growing output in the US that could partly offset output cuts by OPEC and other producers.
Tuesday 31st January 2017 - Again this morning, UK Gas prices rose across the curve. The main driver for this is colder weather forecasts for the next week, pushing the front end of the curve upwards. Also supporting increasing prices is lower than expected renewable output and concerns over what storage will be available in the colder weeks ahead.
- Market Comments February
Wednesday 1st February 2017 - Prompt and near curve prices in the NBP market continued to climb on Tuesday as colder weather revisions and strengthening coal took effect. There were significant climbs on the Feb-17 contract before expiry with this period settling just over 56p/therm. Cold weather revisions pushing forecasts down for February and March strengthened the front curve. This was compounded by storage levels in Europe which are lower year on year prompting fresh concerns about supply over the coming months. In the UK the GBP weakened against the Euro which also helped to support back end of the curve. Prices have opened strongly again this morning as Russian Gas supply into Europe has dropped, as court challenges Poland’s decision to restrict capacity on the pipeline.
Thursday 2nd February 2017 - Prices climbed on the NBP during Wednesday’s trading session with prices climbing most sharply at the front end of the curve. Front month and near curve contracts lifted as colder weather is likely for the back end of February and into March likely to lift Gas demand. News filtered through yesterday that Russian gas flows into Europe had dropped which lifted most of the continental European gas hubs with some gains passed through into the NBP gas prices, with UK being a net importer throughout January. Far curve contracts gained in the afternoon following a strengthening Oil price but gains were offset by a strengthening GBP.
Friday 3rd February 2017 - Prices continued the upward trend during Thursday’s trading with the front of the curve driving UK gas prices upwards. Refreshed UK weather forecasts models continue to predict colder than seasonal average temperatures from the end of next week through until March. The gains on front months and near curve contracts have been strong this week with March-17 offered above 60p/therm this morning. Strength in Brent Crude Oil through the morning helped to support the back end of the curve, but afternoon losses didn’t filter through to UK gas as the Sterling had lost value against the Euro.
Monday 6th February 2017 - This morning, UK Gas prices have decreased on the back of milder weather forecasts (still below seasonal normal, but slightly warmer than last week), this has reduced demand slightly and has pulled prices on the front end of the curve down. Breaking news today is that Rough storage will have less available for injection over the summer, in turn decreasing prices as we will experience increased supply in the system.
Tuesday 7th February 2017 - This morning, UK Gas prices have reduced. This is following warmer weather runs overnight, which now see temperatures on or around seasonal normal for February. This in turn is reducing demand and pushing prompt prices down. We are also seeing a strengthening of the dollar, which is reducing Oil and Coal prices and impacting the rest of the curve.
Wednesday 8th February 2017 - This morning, UK Gas prices have reduced again following another milder weather run. Temperatures are showing to stay above seasonal normal levels until mid-February. Warmer weather forecasts are drastically changing demand levels and in turn pushing prices down. Towards the back end of the curve, prices are falling in line with falling Oil prices, caused by an increase in US Fuel inventories and reduction in Chinese demand.
Thursday 9th February 2017 - This morning UK Gas prices have risen across the board, this is following slightly colder weather runs this morning extending into next week and a short UK system. Weather is still remaining the dominant driver, but towards the back end of the curve, rising Oil prices are making an impact. Oil is rising on the back of dropping Gasoline stocks in the US.
Friday 10th February 2017 - This morning, UK Gas has reduced in price, following temperatures increasing quicker than expected. Prices on the back end have been limited in their losses, as Oil rises again over uncertainty over supply following the OPEC production cuts; however increased Chinese imports could stabilise this. The UK system is long, which is also adding pressure to the already falling curve
Monday 13th February 2017 - Over the weekend, NBP Gas price have risen following cold weather and rising Oil. This morning, Prices on the front end of the curve have corrected slightly as the weather runs post milder temperatures. The back end of the curve is showing minimal movements, as Oil rose over the weekend, when OPEC claimed 90% of cuts had already been made. This morning Oil is decreasing, as the market remains well supplied.
Tuesday 14th February 2017 - This morning we have seen rises on the UK curve. This is following colder forecasts today for the back end of February, which is in turn increasing demand forecasts. Also yesterday, we saw Oil drop slightly, this morning it has become stronger again as OPEC continue their efforts to cut output (current compliance rate of around 90%).
Wednesday 15th February 2017 - UK Gas prices have dropped this morning, as weak demand levels continue for this week following the mid weather. However, temperatures are set to cool next week going into March, which could increase prices. We are seeing a long system in the UK today, with increases in Norwegian flows into the St Fergus point (up by around 12mcm/day) which is pulling prices down.
Thursday 16th February 2017 - This morning, UK Gas prices have increased across the curve. The main driver this morning is Centrica’s announcement that Rough storage will be unavailable for Gas injection until at least 01/07/17. This is making big impacts to winters. Temperatures are also still forecasting colder for next week onwards, impacting the front end of the curve.
Friday 17th February 2017 - UK Gas has experienced some downward correction this morning, following yesterday’s increase on the back of the Rough news. This along with slightly milder weather revisions and a largely long UK system has added some pressure to the UK curve and pushed prices downwards across the curve.
Monday 20th February 2017 - This morning, UK Gas prices have increased slightly. Although milder temperatures are expected for the next 12-14 days, temperatures are expected to drop closer to seasonal normal for the start of March, impacting the front of the curve. Elsewhere, we see prices rise on the back of rising Oil prices – still reacting to OPEC cuts.
Tuesday 21st February 2017 - UK Gas prices have risen at opening this morning, following rises in both the Oil and Coal markets. Oil is rising as data is released which shows hedge funds betting big across the Oil markets, following OPEC cuts. Temperatures are also set to decrease, as colder changes are expected next week.
Wednesday 22nd February 2017 - This morning, UK Gas prices have opened lower, with stronger losses on the front of the curve. This is following again milder weather revisions and strong wind and solar levels. Oil and Coal prices have also declined today, which is adding pressure to the curve. The pound is strong today and paired with inflation expectations is creating a weak Euro.
Thursday 23rd February 2017 - This morning, UK Gas has increased across the board. Towards the front of the curve, prices have increased more on the back of rising demand and news of the Nigerian LNG pipeline explosion in Rivers State. Milder temperatures are not affecting the curve today, as drivers are bullish. The rest of the curve decreases on the back of rising Oil, as reports show drops in US stockpiles.
Friday 24th February 2017 - This morning, UK Gas prices have decreased, however this is not expected to last all day. The UK has a short system this morning, and demand is higher than average. Temperatures are colder today, next week temps are expected to go back above seasonal normal. Causing the drops this morning are falling Oil prices - following a rise in US stockpiles which is counteracting cuts made by OPEC.
Monday 27th February 2017 - This morning, UK Gas has decreased marginally. This is following increased LNG expectations for the UK and a warm weekend teamed with falling demand. Oil prices also rose this morning, on the OPEC led cuts, however gains were limited by rising US output. Temperatures coming up to this weekend and entering next week are expected to become colder, one to watch.
Tuesday 28th February 2017 - Yesterday, NBP prices dropped off more than initially expected, this morning we have seen upward correction. The main driver for today’s price rise is colder weather runs this morning, increasing cold risks for March. Oil has continued to trade sideways today, having no impact on the curve this morning. The UK system is balanced today, shorter than we saw yesterday.
- Market Comments March
Wednesday 1st March 2017 - UK Gas has continued its downward trend from yesterday afternoon, this was following Centrica’s announcement that no capacity would be offered at the Rough Storage facility for 12 months from April 2017. This will create a surplus in the UK system, which is what has pushed prices down so dramatically. Weather is expected to be cold next week, after that is expected to return to the mild weather we have been seeing.
Thursday 2nd March 2017 - This morning we can see rises on the NBP curve. Low wind generation and stronger demand from CCGT’s has increased prompt contracts. Yesterday afternoon, Oil increased slightly, this morning we have seen it fall slightly as US inventories hit a record high with producers boosting Shale Oil production.
Friday 3rd March 2017 - This morning, UK Gas prices have dropped. We have a really long UK system today, as we expect 3 LNG arrivals to the UK in the next 4 days. Temperatures are also expected to become milder from Tuesday next week, and rise as much as 4°C above seasonal normal from Thursday. Oil prices have risen slightly this morning following a weaker dollar, however not near the levels we have seen at the start of this week.
Monday 6th March 2017 - This morning, UK Gas prices have declined. This is following milder weather expectations for this week and going forwards. The UK has a balanced system this morning, which is causing no impact to prices. Oil prices have fallen slightly this morning, as lower Chinese growth targets are announced and Russian output continues to cast doubt on cuts.
Tuesday 7th March 2017 - The NBP market opened lower on Monday fuelled by milder weather forecasts and a drop in demand to start the week even as industry started back up following the weekend. Forecasts across the UK are expected to sit up to 4°C above seasonal norms for the next 2 weeks. The UK supply outlook was boosted as South Hook flowed on average 23mcm on Monday following an LNG arrival on 3rd March, with two more expected by the 18th. The afternoon turned bullish as the far curve was supported by a weaker GBP against Euro and strengthening Oil. The UK has seen a mixed open with prompt easing off today but further dated remain stronger as GBP again opens weaker.
Wednesday 8th March 2017 - This morning, UK Gas prices have fallen across the curve. Drivers for this are, milder weather predictions – with the next week or so showing as above seasonal normal and Oil price decline, as American stocks grow, they are overpowering the OPEC cuts and in turn pulling prices down.
Thursday 9th March 2017 - This morning UK Gas prices have continued to fall. Main driver this morning is milder weather runs released this morning and a strong dip in Oil yesterday (-5%) following increased US inventories. We have a balanced system today, lower demand and high LNG send out, which are also impacting the curve this morning.
Friday 10th March 2017 - Fairly static prices for the UK Gas market today, following the bearish momentum gained in previous days. Losses are supported by an LNG arrival at South Hook (4 cargoes scheduled before the end of March), lower demand caused by higher temperatures and Oil prices falling. Losses are limited at the minute by weakness in the Pound as the Euro strengthens.
Monday 13th March 2017 - A long system in the UK this morning is the main driver, 37.7 to be exact. This oversupply, combined with lower demand following the warmer weather forecasts has sent prices plummeting across the curve. We are seeing more substantial losses at the front end, but losses are out to the back end caused by reducing Oil pricing – following increases in US inventories.
Tuesday 14th March 2017 - UK Gas prices this morning have increased. There is still a healthy system length in the UK, considering there are reduced flows from Langaled and South Hook is offline until 10am. Main driver for today, is the Pound collapsing as Theresa May is given the go ahead to trigger Brexit and Nicola Sturgeon starts legal proceedings for a Scottish Independence referendum.
Wednesday 15th March 2017 - UK Gas has made some marginal rises this morning, slightly stronger at the front of the curve. This is following rises in Oil prices as industry data yesterday showed that US Crude stockpiles were showing a drawdown. Losses are limited as temperatures stay warm and the UK system is still long – although we are seeing drops for Norwegian imports.
Thursday 16th March 2017 - This morning, UK Gas prices have risen. Cooler temperatures are increasing demand (set to jump a possible 5% today) and pushing prices up along with Oil increases after official government data shows that US stockpiles have reduced from their record highs. The system still remains long – at 30 mcm today, showing oversupply in the UK, which could be limiting rises.
Friday 17th March 2017 - This morning, UK prices have decreased slightly, however remaining relatively static. The UK system is still long (12mcm), however we have seen a slight drop off in Norwegian imports. LNG supplies are still remaining healthy and Oil prices have fallen as doubts surrounding the OPEC cuts continue to circle.
Monday 20th March 2017 - This morning, UK Gas prices have weakened. This is following consistently long UK system data – we have higher Russian flows and lower demand levels, there is also a stable Oil market causing minimal impact. This week in the UK, we are forecast slightly colder weather, however in mainland Europe temperatures continue to reside above average, which lessen the need for Gas to be sent through the Interconnector.
Tuesday 21st March 2017 - This morning UK Gas prices have opened with increases. Main driver for this is a short UK system, caused by an unplanned outage at Kollsnes facility. This teamed with increased demand caused by colder temperatures over the next couple of days is causing prices to rise. Oil also rises this morning, as OPEC reveal plans to extend cuts further.
Wednesday 22nd March 2017 - UK Gas has dropped across the curve this morning. Main driver for this is Oil prices falling – it has fallen to its lowest level since November 2016 as rising US Crude stocks continue to increase the global oversupply despite any OPEC led cuts. The outage at Kollsnes was restored today, which has taken the UK system back to long, which is also providing weight to the curve.
Thursday 23rd March 2017 - UK Prices have remained very static this morning, as Oil remains around the 50 region bouncing slightly higher than yesterday’s levels. Temperatures are set to soar around the end of March (potentially up to 7°C above seasonal normal), adding bearish sentiment to the front end of the curve. The UK system is balanced today, causing no real impact.
Friday 24th March 2017 - UK Gas Prices have fallen this morning, with more considerable falls on the front end of the curve. On the prompt, main driver this morning has been warm weather expectations for next week (potential for 20°C temperatures in London). Towards the back end, prices have fallen less as Oil remains at a stable level as Saudi Arabia suggests it may reduce Oil exports to the US.
Monday 27th March 2017 - This morning, UK Gas has fallen. This is following warm weather forecasts for this week continuing into next week. We have a balanced UK system, with good LNG levels and Norwegian flows to the UK. Oil prices are also down, adding pressure to the curve, as we see rises in US drilling activity.
Tuesday 28th March 2017 - Prices have risen this morning. We have a short UK system (-35mcm), as we see reduced Norwegian flows from Langaled. Oil prices have also risen this morning, on the back of a weaker dollar. Rises are not particularly drastic, as warm weather is continuing to reduce demand.
Wednesday 29th March 2017 - Bullish trend to the UK Market this morning. Main driver is rising Oil – this is following supply disruptions in Libya and increasing likeliness of OPEC extending supply cuts. Pound also dropped against the Euro this morning, as Theresa May signs Article 50. The UK system is back to being balanced today, and weather remains unchanged from the mildness for the next 2 weeks.
Thursday 30th March 2017 - UK Gas has risen considerably this morning due to a number of factors. As buyers close positions for the expiry of front month and summer this increased liquidity in the market and pushed prices up. This morning we have also seen rising Oil prices, as Russia plan to fulfil obligations for production cuts by the end of April. Imports have also dropped from the Netherlands and Norway.
Friday 31st March 2017 - UK prices seem to have increased from yesterday morning; however they have dropped from yesterday evening. This is following a well-supplied UK system (29mcm long) teamed with the warmer weather forecasts. Oil prices have risen again this morning, as there becomes growing confidence in OPEC and Russia agreeing to extend production cuts.
- Market Comments April
Monday 3rd April 2017 - UK Gas prices have risen this morning, as Oil prices rose over the weekend as an effort is still being made to try and rebalance the market. However US rig counts have increases, so Oil is expected to stabilise this morning. Langaled flows and Russian flows have reduced this morning, however the UK system is balanced and causing no real concern. Temperatures are mild for the week, in turn reducing demand to below seasonal normal levels.
Tuesday 4th April 2017 - Main driver for UK Gas’ rises across the curve this morning, are rising Coal prices. Coal prices are rising as Cyclone Debbie causes supply disruption, in turn pushing Gas prices upwards. The UK system is also short this morning, as Langaled continues to decrease its flows and there is an unplanned outage at Kvitebjorn expected for 4-6 days to complete corrective maintenance.
Wednesday 5th April 2017 - UK Gas is lacking direction this morning, as it places juxtaposing fundamentals. As Langaled flows stay at around 45, Russian flows and LNG levels are increasing, creating a long system for the UK. Temperatures are mild for the coming week, they dip next week but are expected to increase again for Easter weekend creating a positive outlook. However, Oil prices are rising sharply this morning, following an unplanned production outage in the North Sea and expectation of drawdown in the US Crude inventories.
Thursday 6th April 2017 - UK Gas prices have remained around the same sort of levels this morning. There has been no real change to weather forecasts, and the UK system is long – despite Langaled still working at lower than usual. Oil prices have also weakened this morning, as yesterday reports were submitted of increased US inventories pushed prices down.
Friday 7th April 2017 - The bulls have returned to the NBP this morning correcting yesterday’s afternoon losses, with the primary driver being gains in the Oil market. Oil’s upwards movement has been triggered by the US conducting airstrikes in Syria overnight. This triggered the gains firstly beginning in the Asian markets and continuing into this morning. The system opened 3mcm long and LDZ demand is forecasted to fall into the weekend with the expectations of warmer weather. Langeled flow are still nominated at 45mcm due to the outage at Kvitebjørn removing 10mcm of supply, this is expected to be corrected by next week which would see Langeled nomination to return to the 55mcm level. Day-Ahead gas is currently trading above the W/E and Front-Month contracts thus incentivising MRS withdrawals. The GBP has dropped from weak Manufacturing figures at 9:30 showing that Industrial sector has shrunk versus forecasts of growth. In the USA they have a big afternoon with Non-Farm Payrolls and Employment data released at 13:30, and all eyes will be watching the US Dollar Index and Oil afterwards.
Monday 10th April 2017 - UK Gas prices have fallen this morning. The UK system is long, and is well supplied as demand drops slightly. Three LNG tankers are expected to arrive to South Hook by April 14th, easing any supply concerns as demand may increase as temperatures step closer to seasonal normal.
Tuesday 11th April 2017 - Gas prices this morning have reduced. The UK has a long system, Langeled is beginning to return to normal levels and LNG levels are increasing for April, creating healthy supply for the UK and weighing on prices. Temperatures are remaining on or around seasonal norm for the coming week, however wind generation levels are set to increase and push prices down, following breezy forecasts.
Wednesday 12th April 2017 - UK Gas prices have increased this morning; this is on the back of continuation of the rising Oil prices – as Geopolitical tension seems to remain a bullish driver for Oil, and an official announcement that Rough will not restart injection operations for 2017/18. Both these factors are discrediting healthy UK system news and pushing prices upwards.
Thursday 13th April 2017 - The UK Gas prices have risen this morning, still shaken from the news that Britain’s largest storage site – Rough will be unable to inject for the next 12 months and teamed with rising demand levels, this is pushing UK Gas prices up. UK temperatures have remained unchanged from yesterday, with expectation that between 18th and 21st of April will be the coldest period.
Tuesday 18th April 2017 - UK Gas prices have risen this morning, on the back of increasing demand. Demand is rising following weather forecasts for upcoming colder temperatures (2-4°C below seasonal normal levels). The UK system is also slightly short today, as St Fergus levels drop following an outage, adding more stress to the increased demand levels.
Wednesday 19th April 2017 - UK Gas prices have risen this morning as cooler temperatures continue to add strength to prices, along with an expected drop in LNG deliveries to the UK. Yesterday, Theresa May’s announcement strengthened the Pound, however with the decision being made today whether to host a snap election, there are volatile expectations for currency.
Thursday 20th April 2017 - UK Gas prices have fallen across the curve this morning. Forecasts suggest that demand is set to fall over the coming days, and along with yesterday’s strengthening of the Pound this has created a bearish atmosphere for the curve. The Pound has continued its gains against the Euro, following Theresa May’s news of a general election on 8th June. LNG Data has also improved, with expectations that 3 vessels will arrive at South Hook before 10th May.
Friday 21st April 2017 - Yesterday, Gas prices dropped towards the afternoon, as Oil prices fell and the Pound continued its rally against the Euro. This morning, prices seem to be lacking direction with minimal movement. Temperatures are cold for this week, however forecasts have shifted and now point to warmer weather towards the end of April, and demand is still above seasonal normal however it is lower than previous days, showing a steady decline.
Monday 24th April 2017 - UK Gas this morning has increased on the front end. Main driver for this this morning, is weakening of the Pound against the Euro coming up to the French election. As Macron currently leads the election race, the Euro has strengthened towards his pro-EU and Economic Reformist policies. Towards the back of the curve we see losses, as Oil prices fall on the back of doubts around OPEC output cuts.
Tuesday 25th April 2017 - UK Gas prices have declined this morning. Oil prices have fallen again, as people doubt whether the OPEC cut extension will affect the already oversupply of the market. Also as temperatures are set to increase for the start of May – in turn reducing demand, the current cold spell is ignored within prices and declines are seen.
Wednesday 26th April 2017 - The UK Gas curve has fallen this morning. Pressured by a falling Oil market, as US Crude Inventories continue to rise and global supply seems to increase, doubts continue to be cast over whether OPEC’s extended cut will happen or even make a difference. The cold spell has officially hit the UK this morning, so as demand increases, this will limit any further decreases on the front end of the curve.
Thursday 27th April 2017 - UK Gas prices have strengthened this morning, on the back of a short UK system, outages in Norway and strong weather driven demand. The Norwegian Kårstø plant is out this morning; however it is expected to be back online late this afternoon. There are no major changes to the UK temperatures for this week this morning; however uncertainty is still remaining around next week’s forecasts.
Friday 28th April 2017 - UK Gas prices have risen this morning, on the back of a short UK system, colder weather forecasts and higher Oil prices. Colder temperatures announced overnight for the UK, however there is still uncertainty around next week’s forecasts and how they will turn out. Generally though, heating demand forecasts are increasing. The following week, we are still expecting a period of above seasonal normal temperatures. Rough has announced it will not be withdrawing between 11th May and 30th September, adding supply concerns. Oil prices have increased this morning, as OPEC reinforces its idea of an extended production cut to drawdown excess fuel supplies. However, with a continuing oversupply in the market, this may potentially not last.
- Market Comments May
Tuesday 2nd May 2017 - This morning, UK Gas has opened higher. Main drivers are a short UK system, strong demand levels and Norwegian outages. However Oil prices are dropping which is capping any further increases. Temperatures remain around seasonal normal for the next 2 weeks, LDZ consumption is expected to remain above seasonal normal for those 2 weeks. Outages at Norwegian plants Gullfaks and Kollsnes, affecting supply levels, creating a short UK system as demand rises. Oil prices have fallen this morning, as OPEC cuts fail to impact the oversupply.
Wednesday 3rd May 2017 - UK Gas prices have remained relatively stable this morning, as juxtaposing news forces a lack of direction. Temperatures are set to go slightly milder over the weekend, but could potentially fall over the next 2 weeks. The UK system is long today – along with above seasonal normal demand. LNG levels remain the same and Langeled flows increase to try and bridge the gap. Oil prices have risen slightly this morning, following declining US inventory levels. Capping any gains was a slope in compliance with OPEC’s production cut efforts.
Thursday 4th May 2017 - UK Gas prices have fallen across the curve today, however liquidity on the market is low. We have a long UK system this morning, as Kollsnes comes back online and we see stronger Langeled flows. Demand seems to have softened, as temperatures remain unchanged, predicted to hover at around seasonal normal for the next 2 weeks. Oil prices have seen a decline - adding weight to the curve, following a lower than expected drop in US inventories. Prices have traded at their lowest prices since late March.
Friday 5th May 2017 - This morning we have seen sharp declines throughout the UK curve prices. Oil prices have fallen significantly overnight, and along with easing demand and a comfortable system this is weighing on prices. UK temperatures are slightly colder next week; however there have been warmer temperature revisions to next weekend. French LNG send outs have increased, Langeled flows have reduced this morning, despite the return of the Kollsnes facility following an outage. Oil prices have reached a near 5 month low overnight, as concerns emerge over rising US supply.
Monday 8th May 2017 - UK Gas prices look as though they have dropped off this morning, as they correct from Friday afternoon’s rally. Temperatures are expected to remain cold in the UK this week; however from the weekend and next week we are expecting warmer temperatures, which in turn are pushing LDZ consumption closer to seasonal normal. We have a short UK system this morning, as Langeled flows reduce, the Troll outage begins and the Gullfaks outage continues. Oil prices weakened at the end of last week, as US inventories rose. This morning Oil has risen again as Saudi Arabia’s Energy Minister has said that an OPEC-led production cut which is due to end in June, will likely be extended to cover all of 2017. Gains however are limited as inventories continue to rise.
Tuesday 9th May 2017 - UK prices have remained at the same sort of levels this morning, as fundamentals continue to cancel each other out and limit movements. As temperatures are set to heat up this weekend and next week, LDZ consumption is also set to drop below seasonal normal. UK system is fairly balanced this morning; however Langeled flows have reduced again by around 3mcm. Oil prices have remained relatively static this morning, as the fight between increasing US inventories and OPEC’s extension of the production cut rages on and caps movements either way.
Wednesday 10th May 2017 - UK Gas prices have risen this morning, on the back of reduced flows and falling Oil prices. The UK system has opened short this morning. Langeled flows have reduced to 21mcm, due to ramp down of Orman Lange ahead of the it’s full production cut tomorrow. Resulting in drops in Norwegian flows to the UK.
Thursday 11th May 2017 - UK Gas prices this morning have remained at similar levels to yesterdays close. The market opened higher, and has since softened. Easing demand being the main driver. The remainder of this week is mild, and next week is expected to be especially warm. This in turn in reducing demand and pulling prices down. UK system has opened short, with demand estimated at 24mcm below seasonal normal. Langeled flows have reduced again, due to the Orman Lange shut down, and the Bacton disruptions continue. Oil prices have also risen this morning, as we have seen a drawdown in US inventories.
Friday 12th May 2017 - UK Gas prices have reduced this morning – expectations of higher Norwegian imports and easing demand next week have weighed on the curve. Mild weather over the weekend and next week, reducing demand. Cooler temperatures are then set towards the end of next week, however should return milder following. We have a short UK system, Langeled flows are still reduced due to the Orman Lange shut down, this is expected to return Monday, and so Norwegian flows will start to increase. Oil prices have stabilised this morning, as its expected OPEC led production cuts are expected to last beyond the middle of this year. Crude inventory levels are also at their lowest since February.
Monday 15th May 2017 - UK Gas prices have increased this morning. Contracts have opened higher across the curve on the back of a short UK system and rising Oil prices. Oil prices have risen sharply this morning, as Saudi Arabia and Russia have agreed a 9 month extension to the output cuts. We have a short UK system this morning, as the Orman Lange shutdown has been extended for a further 2 days. However, demand is showing as 32mcm below seasonal normal.
Tuesday 16th May 2017 - UK Gas has moved marginally this morning from yesterday afternoons prices, but has posted gains across the board from yesterday morning’s prices. NBP is short this morning, as we see weak flows from Bacton SEAL and Langeled flows continue to reduce day on day – however this is expected to ease tomorrow as Orman Lange returns, and Troll returns Friday. Oil prices have increased again today, as the market continues to digest Saudi Arabia and Russia’s announcement yesterday.
Wednesday 17th May 2017 - NBP prices opened lower this morning, but have since posted some increases. A short UK system, higher Oil and technical trading seem to be the support. From tomorrow onwards the UK is expected to see cooler temperatures, next week is expected to return towards seasonal normal levels. UK system is slightly short today (-2mcm), and demand is below seasonal normal. Bacton flows have increased, and Langeled flows have returned to levels around 20mcm as the Orman Lange outage nears its end. Oil prices have risen slightly this morning, as the market continues to react to cut announcements. However rises are limited as US Crude Inventories report rises.
Thursday 18th May 2017 - UK Gas prices have increased this morning, due to tight system dynamics. Cooler temperatures are expected over the weekend, with LDZ consumption expected to reach above seasonal normal levels up until Monday. Norwegian flows have not increased as much as originally thought following the return of Orman Lange, keeping the NBP in a short system position. Oil prices have ticked up again today, as the fight between production cuts and ample supply rages on.
Friday 19th May 2017 - It was a volatile day on the market yesterday with Oil the key driver especially with a late rally in the afternoon session. Confidence is increasing in an extension to OPEC cuts at the meeting on 25th May helping to boost prices. NBP Gas prices have opened marginally lower on Friday as upcoming temperatures have been revised upwards overnight expecting an above seasonal normal period of weather in the UK. The system has opened slightly short however expectation of increased Norwegian flows next week and warmer weather have ensured a soft open. An announcement from the Dutch government is also expected to be released at 11:00CET this morning. Any key events will be published in our newsflash report.
Monday 22nd May 2017 - The NBP market has opened significantly lower on Monday morning as a number of bearish fundamentals pressured the front of the curve. Over the weekend, weather forecasts have ticked upwards with the first 30°C day expected in London at the weekend. On the back of this the expected demand has dropped to 30mcm below seasonal normal pressuring the prompt. Troll field maintenance in Norway has ended and flows have ramped up to 38mcm (nominated at 45mcm) from Norway and LNG imports received a boost with the potential of 3 vessels to reach the UK shore by the end of May. The far curve was supported as Oil continues to strengthen and climbed above $54bbl as the expectation of a further OPEC cut increases ahead of the OPEC meeting on 25th May.
Tuesday 23rd May 2017 - Prices have opened up lower than on Monday’s close with prices falling across the curve. The UK system opened 15mcm long with demand pegged at 192 which is 18mcm below seasonal average. Strength in Oil, Coal and an unexpected outage supported the curve on Monday with prices generally traded upwards. Prices have opened lower this morning with temperature forecasts remain above seasonal norm for the rest of May which is pressuring the front of the gas curve as demand is expected to remain below seasonal averages. One of the most recent bullish factors threatening gains on the back end of the curve has been Oil, however prices have weakened this morning as news emerged that Trump plans to sell off half of the country’s Oil stockpile.
Wednesday 24th May 2017 - The UK gas market has seen gains this morning as the market opened with a short system and strength in Oil overnight. The UK system opened 11mcm short as flows from Langeled dropped to 18mcm from around 40mcm yesterday. Oil continued to climb, sitting at $54.48 currently as OPEC production cuts look set to extend in the meeting on Thursday. Warmer weather continues to dominate the forecasts with gas demand expected to fall over the coming fortnight with the UK and parts of Europe expected to sit up to 11°C above seasonal averages.
Thursday 25th May 2017 - The NBP gas price has remained relatively unchanged across the curve on Thursday as a number of factors weigh in across all contracts. The prompt and front of the curve remains balanced despite a short system, as warmer weather continues to reduce gas demand in the region. LNG cargoes expected to arrive into the UK are also easing supply fears. Further out, the strength in Oil has done little to the back end of the curve at present; however volatility could be seen throughout today as OPEC meet in Vienna with extension to cuts widely accepted. Yesterday, it was formally announced that Groningen production would be cut a further 10% from 24bcm to 21.6bcm with a further cap placed on production during colder years.
Friday 26th May 2017 - Warm weather continues to reduce demand at in the UK pushing prompt prices downwards. Today demand is up to 40mcm below seasonal average as temperatures climb close to 30°C. The price of Crude Oil weakened significantly on Thursday as OPEC’s planned production cut extension did little to boost the market as deeper cuts were expected rather than just a 9 month extension. The price of a barrel fell by over $2. Further losses on the far curve were offset by a weaker sterling against the Euro as uncertainty over the UK General Election moved in as the Conservative lead fell.
Tuesday 30th May 2017 - UK Gas prices have increased slightly this morning, with stronger gains towards the back of the curve. Slightly warmer weather outlook, towards the end of this week a 1⁰C increases against seasonal normal levels should be seen. The UK system is 17mcm long this morning, with demand also pegged below seasonal normal. Norwegian imports to the UK have increased.
Wednesday 31st May 2017 - UK Prices have dropped off this morning, on the back of a healthy system, stronger Norwegian flows and falling Oil prices. Warm outlook for the UK, with temperatures expected to increase over the next few days. The UK system is 16mcm long today, and demand is pegged at below seasonal normal, adding weight to prices. Possibly limiting losses, is the extension to the Nyhamna outage. Coal prices offered support yesterday, but as they flatten and Oil prices decrease it pushes prices down. Oil prices are falling on the back of increasing output from Libya and increasing US production undermining OPEC rumours.
- Market Comments June
Thursday 1st June 2017 - UK Gas prices have risen marginally this morning, on the back of lower LNG send outs. The UK is still warm this week, however temperatures for next weekend and inwards have been revised cooler. This morning the UK system is short, with weaker Norwegian exports (Langeled is down to 24mcm) and falls in LNG send out levels – send outs from South hook have fallen to just 5mcm from 18mcm yesterday. Oil prices have risen this morning, adding support to the curve. This is caused by expectations that the US could potentially pull out of a global climate accord.
Friday 2nd June 2017 - UK Gas prices have reduced across the curve this morning, as the UK system heads back into a healthy balance. The UK is expected to see warm weather over the next fortnight, with temperatures staying on or above seasonal normal. This is allowing demand to drop below typical levels (9mcm below seasonal normal total demand). Norwegian imports to the UK have reached back to a good level this morning, as Langeled returns to 38mcm. LNG levels are falling however, potentially limiting losses. Oil prices have dropped again this morning, amid global supply glut concerns following President Trump’s decision to withdraw from the global climate change pact
Monday 5th June 2017 - UK Gas prices have sharply increased this morning, on the back of bullish news adding support to the curve. Saudi Arabia, the UAE, Egypt and Bahrain have cut ties with Qatar, following claims the country supports terrorism. This morning, this news created a sharp jump for UK Gas. No big changes to temperatures this morning, cooler conditions expected for this week, but the weekend is set to warm up again. Oil prices have started to move down this morning on the back of the US leaving the Climate Change agreement, however this is still a volatile subject and could provoke more change.
Tuesday 6th June 2017 - This morning, UK Gas prices have increased minimally staying at similar levels they closed at last night. We have seen upward revisions to LDZ consumption for the next 10 days, stopping any potential losses following a long UK system. Weak LNG send outs remain in the UK. Warmer weather is expected for this weekend, however temperatures are set to get cooler next week, adding support to the curve. Oil prices are down this morning, as expectations are that the political rift in the Middle East could reverse OPEC’s attempts to stabilise the market. This and LNG are increasing volatility on the UK market, affecting the curve. The pound has begun to recover from its losses, as election polls start to favour a Conservative win.
Wednesday 7th June 2017 - UK Gas prices have remained fairly static compared to yesterday’s levels this morning. Opening slightly lower and since increasing. Warmer weather is expected for the next few days in the UK, temperatures are expected to be 2⁰C above seasonal normal by Sunday. Although warm it is set to remain unsettled and breezy. The UK system is balanced this morning, however Norwegian flows are lower as Langeled continues to fall, today nominated at 18mcm. LNG send outs also remain weak. Oil prices have increased this morning, on the back of the ongoing tension in the Middle East and falling US stock levels.
Thursday 8th June 2017 - UK Gas prices have opened higher this morning, as the UK system opens short and demand increases. Temperatures are turning warmer in the UK – set to be well above seasonal normal, especially towards the weekend, with Sunday being the warmest day. The UK system is short this morning (-15mcm), and demand is showing an increase. Adding support to prices. Oil prices have fallen this morning, following losses yesterday after data showed that US inventories rose, this has re-established concerns over a global supply glut.
Friday 9th June 2017 - UK Gas has risen this morning, as a weakening pound and LNG news become the main drivers. Following the UK General Election, the pound has been losing value against the Euro, supporting the curve and pushing prices upwards. Yesterday, 2 LNG cargoes which were expected at South Hook were diverted, adding pressure to UK supply. Oil prices have resumed their downtrend at this morning’s open, evidence of the continuing global fuel glut is adding pressure to Oil prices weighing them down. This fall in Oil, could potentially limit rises from other drivers.
Monday 12th June 2017 - UK Gas prices have fallen this morning, on the back of reducing risk following Thursdays LNG panic and easing demand. UK temperatures are cool today, but are set to increase above seasonal normal levels (between 1-3⁰C above) for the rest of the week. The NBP system is long this morning, and demand is below seasonal normal – adding weight across the curve and pulling prices down. On Thursday, when we saw 2 LNG cargoes due to come into South Hook change direction, this pushed prices up. This morning, the risk for this has been eradicated, as it is expected the cargoes will still arrive in the UK in 10 days.
Tuesday 13th June 2017- UK Gas prices have fallen this morning, on the back of warm weather and interconnector maintenance. Oil prices are up this morning, as statements that OPEC-leader Saudi Arabia will make significant supply cuts to Asia are released. As we still see good supply levels from the US, this limits any rises. Maintenance beginning on the Interconnector has increased available supply in the UK. Injections are being made in the UK.
Wednesday 14th June 2017 - UK Gas prices have fallen this morning. Temperatures are warmer today in the UK, demand is 14mcm lower than seasonal normal and LDZ consumption is set to fall towards the end of this week.
Thursday 15th June 2017 - UK prices have fallen this morning, as easing demand continues to weigh on prices. Weather forecasts for the UK are increasingly warm, in turn reducing demand levels and pushing prices down. Oil prices have continued yesterday’s sharp falls this morning, opening at a loss. This is following increases in global inventories and doubts over whether OPEC will have the ability to implement their supposed cuts. Possibly limiting losses is a balanced UK system (falls in Norwegian flows due to outages), and a depreciating Pound against the Euro, as the General Election backlash continues.
Friday 16th June 2017 - UK Gas prices have pushed up slightly this morning, on the back of rising Oil prices and a short UK system. Temperatures still remain very warm in the UK however, limiting rises. Today the UK system has opened short – supported by unplanned outages at Kvitebjǿrn and Kristin plants, and reduced Langeled flows, despite maintenance ending yesterday. Yesterday the Pound appreciated against the Euro, and is still at good levels this morning. Positive effects were created by the Bank of England’s decision not to increase interest rates. Oil prices have increased this morning, on the back of a partial export halt taking place in Libya.
Monday 19th June 2017 - UK Gas prices have increased this morning on the back of a short UK system. UK weather is expected to remain hot over the next couple of days before turning cooler for a short interval. The UK system has opened short this morning, as LNG send out levels remain weak. South Hook remains at 5mcm, and Dragon at 8mcm. Norwegian exports to the UK becoming stronger with Langeled nominated at around 18mcm, as Norwegian Gas is rerouted from the continent.
Tuesday 20th June 2017 - UK Gas prices have increased this morning, following big news surrounding the UK’s Rough storage. UK temperatures are set to remain hot today and tomorrow, turning cooler towards the end of the week. This cool will only be for a small period, before warm weather returns for July.
The UK system is around 18mcm short this morning, highlighting increasing demand. Visund plant is experiencing an unplanned outage. Langeled is having to ramp up today, as the Dornum and Emden outage power on. This morning, Centrica has announced that the UK’s largest storage facility Rough will be permanently closed. Cushion Gas is expected to take around 3 winters to empty out of Rough, offering support to the curve this morning.
Wednesday 21st June 2017 - UK Gas prices have increased across the curve this morning, on the back of a short UK system. Temperatures in the UK are expected to be very hot, but from tomorrow and into next week, weather is expected to become fresher and breezier. The NBP system is short this morning. Norwegian flows to the UK have dropped, as Gas is rerouted to the continent following the end of the Emden maintenance. Oil prices are still weak this morning, as supply glut fears continue to weigh heavily on Oil prices.
Thursday 22nd June 2017 - The UK opened with a short system on Thursday morning, sitting 33mcm short, with prompt prices climbing and the curve contracts easing falling. The warm weather witnessed in the region has eased off and the gas demand for power generation should begin to reduce. Oil continued to weaken on Thursday despite a draw in US stock levels. Officially in a bearish market as Oil holds prices at 10 month lows. Libya and Nigeria have increased production and global supply remains strong. Conflicting views on raising UK interest rates in the Bank of England helped contribute to a weakening GPB to Euro on Wednesday. Carney against the decision due to Brexit fears but the chief economist expressed the need to increase rates.
Friday 23rd June 2017 - UK Gas prices have marginally increased this morning, on the back of cooler weather and a short UK system. Latest weather runs for next week have come back cooler, with the 45 day forecast cooler also – however still above seasonal normal expectations. The UK system is short this morning, as unplanned outages are taking place for Kollsnes and SEGAL. The outages are expected to last 5-6 days. Oil prices have edged up this morning, recovering from some of the sharp falls we have experienced this week.
Monday 26th June 2017 - UK Gas prices have increased this morning, on the back of a short NBP system, and rising Oil prices. Temperatures are still above seasonal normal today, however, they are expected to become cooler towards the back end of the week. With warm weather expected for the week after. The UK system has opened short today, as the SEGAL pipeline unexpectedly extends its current outage for another 2-3 days. Oil prices have increased this morning, on the back of a weaker dollar. But continual rises in US drilling activity are potentially limiting rises.
Tuesday 27th June 2017 - UK Gas prices were on the rise again this morning, as rising Oil prices and cooler temperatures drive the market. Weather in the UK is wetter and cooler today, and this is expected to last all week. Next week we may see warmer weather again, with temperatures returning to seasonal normal. The UK system is balanced this morning, however SEGAL has again extended its outage, which could add some pressure to flows. Oil prices have increased again this morning, as investors continue to cover their short positions. Gains are limited, as worries around the global supply cut continue to cap prices.
Wednesday 28th June 2017 - UK Gas prices have opened this morning in line with yesterday’s closes, remaining static. The NBP system has opened balanced this morning. There is still an outage at SEGAL, affecting St Fergus Shell flows, but it seems Langeled is covering any losses as Norwegian imports increase. An LNG cargo arrived at Dragon yesterday, increasing LNG send out nominations to around 9mcm. Oil prices have fallen this morning, as they are weighed down following US inventory gains, which have returned supply glut worries.
Thursday 29th June 2017 - UK Gas prices this morning have risen on the back of the return of IUK, ongoing unplanned outages and higher Oil prices. The NBP system has opened balanced this morning, with demand pegged below seasonal normal. The end of Interconnector maintenance has seen IUK exports return with nominations of around 44mcm, this removes surplus supply from the UK. The SEGAL outage continues, and Langeled flows are currently down, creating tight system dynamics and adding support to prices. Oil prices have risen this morning, following a decline in US Gasoline inventories.
Friday 30th June 2017 - The NBP forward curve shed weight at the open with the Day Ahead contract moving down by over 1.0p/therm. The system has opened 16mcm log as Norwegian imports have ramped-up with the Langeled pipeline nominated to flow 39mcm into Easington, and a reduction in storage withdrawals day-on day. The return of the IUK following its maintenance has enabled the NBP to send gas to the Continent, the first time since the 14th June.
- Market Comments July
Monday 3rd July 2017 - UK Gas prices have increased this morning, on the back of a short NBP system, and rising Oil prices. Temperatures are still above seasonal normal today, however, they are expected to become cooler towards the back end of the week.
Tuesday 4th July 2017 - UK Gas prices have fallen this morning, on the back of a balanced system and slightly lower Oil prices this morning. The UK is expected to be warm in the coming days, but cooler over the weekend. After that it is expected to return to seasonal normal. We also have lower wind and solar levels this week, increasing Power burn and offering support. The NBP has opened marginally long this morning, with demand pegged slightly below seasonal normal. 3 nuclear facilities are on maintenance until the end of the month. Bacton and Langeled flows have increased, to make up the short fall. LNG send outs have also increased, with 2/3 expected cargoes coming soon to South Hook.
Wednesday 5th July 2017 - UK Gas prices have increased this morning, on the back of a short UK system and limited market liquidity. Temperatures are beginning to turn warmer over the next couple of days, however they are expected to turn cooler on Sunday. The NBP system has opened short this morning (-6mcm), as UKCS flows remain weak due to the continued outage at SEGAL and lower St Fergus Mobil flows. Low liquidity in the market – potentially caused by holidays, no real drivers and buyers waiting to see what happens, and static Oil prices have added support to the curve.
Thursday 6th July 2017 - Gas markets came off yesterday. From an overall perspective pressure came mainly from two sides. First of all, oil prices came off again after having rebounded from 45,2 to 49,5 USD/barrel in nine days. Bearish sentiment was resumed after Russia told OPEC that they are not interested in increasing any production cut further. In the short end of the market the overall gas supply seems healthy. Imports from Russia are high and large amounts of LNG arrivals are on its way. Isle of Grain will on Saturday receive the first US LNG cargo from the US Gulf production and shortly after three more cargos will follow. Overall a healthy gas market. The markets open slightly down this morning.
Friday 7th July 2017 - UK Gas prices have fallen this morning, on the back of healthy flows, a long system and weaker Oil prices. The NBP system has opened long this morning. Norwegian flows have increased, as Langeled and Vesterled flows have ramped up. Oil prices have fallen sharply this morning, as news hits of a rise in US production. This weekend in the UK, temperatures are set to be warm and dry, with possible breeziness and occasional rain next week.
Monday 10th July 2017 - UK Gas prices have fallen this morning, on the back of a healthy system. Norwegian flows have increased this morning, following the return of SEGAL from outage and high Langeled flows (47mcm). LNG send outs from South Hook have increased this morning, and should carry on this trend as at least 2 more cargoes are expected to arrive before the end of July. Oil prices have fallen again slightly this morning, as high drilling activity continues in the US.
Tuesday 11th July 2017 - UK Gas prices have fallen this morning, the system is marginally over supplied despite a drop in UK production coupled with declining renewables generation. Coal is up slightly and oil is flat day on day, forecasts for the coming week show a return to above normal temperatures which could put some additional strain on the power grids which are dealing with low hydro and Nuclear, as a result gas demand may rise for cooling load.
Wednesday 12th July 2017 - UK Gas prices this morning, have remained in line with yesterdays close. The UK system has opened short this morning, as Langeled flows have reduced following unplanned outages beginning in Kollsnes and Åsgard. Oil prices have dropped this morning as oversupply continues to add to the current global supply glut. Prices have dropped nearly $1 from yesterday’s peak. Yesterday, demand levels were above seasonal normal levels, this morning, it is pegged at 4mcm below seasonal normal levels, adding weight to the curve and limiting potential gains.
Thursday 13th July 2017 - The system opened 11.9mcm long as Norwegian flows have increased back to 45mcm despite the outage at Kollsnes being extended. The NBP has opened lower than its neighbouring continental hubs with the Day-ahead NBP/ZEE spread being its widest since Sep-16, even though the IUK exports have been flowing at maximum capacity. LNG send-out from South Hook is nominated for 17mcm today vs 21mcm yesterday. IUK exports are lower day-on day due the scheduled outage from 7am-2pm with flows nominated at 46.2mcm.
Friday 14th July 2017 - This morning, the system is again long as flows from Norway rebound and demand in the UK dips slightly, another LNG vessel has just announced its destination to be the UK and is expected to arrive on the 21st of July. Prices are down slightly in early trading, however, the bid remains strong as short sellers look to take profit after a prolonged bear run and as storage operators continue to inject for winter.
Monday 17th July 2017 - This morning, gas prices continue to find support from a short system, in the prompt, and from further gains in oil and coal which will provide support to the energy complex. Oil has rebounded from its previous lows after two weeks of back to back stock draws in the US which is giving the market hope that the process of global supply/demand rebalancing is under way. Weather for this week is set to cool down bringing with it increased wind power production in the UK which should reduce some demand for gas-fired generation.
Tuesday 18th July 2017 - Gas prices reversed a 7-day slide, regaining most of the losses in a single day with the prompt and front months moving up around 2p on the back of a short system, higher power demand and some unplanned Norwegian outages. Additionally, the size and voracity of the move is indicative of a short squeeze, a situation where the market becomes heavy with short sellers who need to exit the market quickly, thus squeezing the price upward. The moves in the NBP were mirrored by the TTF and NCG but with much less intensity moving up more modestly and more equally across the curve. This morning, the system remains short but coal and oil are slightly down, with that gas is offered down slightly on the spot and on the curve with only a few contracts to have changed hands.
Wednesday 19th July 2017 - UK Gas prices have fallen across the board this morning, as the UK system opens long. Temperature forecasts are expecting weather to become below seasonal normal from tomorrow through to Friday, with increased risk of showers. The UK system has opened long this morning. Langeled flows remain strong despite the ongoing unplanned outage at Kollsnes. 3 LNG cargoes are expected at South hook between now and the start of August, again adding to the healthy system.
Thursday 20th July 2017 - UK Gas prices have increased this morning, on the back of a short UK system. NBP opened 15mcm short this morning, with demand pegged 4mcm above seasonal normal. These shortages are due to the ongoing outage at Kollsnes, how expected to last another 7 days. Oil prices are also up this morning, following yesterday’s stockpile report, showing US crude Oil stocks slowing down, in turn pushing Oil prices upwards.
Friday 21st July 2017 - UK Gas prices have increased this morning on the back of a short UK system. The NBP system is 9mcm short this morning, as the Kollsnes outage continues and the Britannia outage begins today. The pound has lost value against the Euro, following Mario Draghi’s speech yesterday afternoon. Oil prices are high this morning, as the drawdown in US stocks continues to affect prices, along with uncertainty around Mondays OPEC meeting.
Monday 24th July 2017 - UK Gas prices have fallen this morning, due to increasing Norwegian exports and weak Oil prices. Weather for the UK this week is looking unsettled, and is looking relatively windy. The NBP system has opened 5mcm short this morning, with demand pegged 8mcm above seasonal normal demand. Oil has taken a steady fall this morning, ahead of the OPEC meeting today.
Tuesday 25th July 2017 - UK Gas prices have made little change this morning, only very slight decreases. There is no real change to fundamentals, yet Norwegian flows are slightly higher. The NBP system has opened 8mcm short this morning, with demand 4mcm below seasonal normal. Norwegian flows are up by 5mcm this morning, as the impact of the Kollsnes outage has reduced and it is expected to finish today. LNG send outs for the UK are set to increase, as 4 cargoes are expected for August. Oil prices have risen this morning, as Saudi Arabia have pledged to decrease exports from next month onwards.
Wednesday 26th July 2017 - UK Gas prices have increased across the curve this morning, on the back of a short UK system and strong Oil prices. UK weather models have been revised cooler, however warmer days are expected mid next week. NBP has opened 16mcm short this morning. Norwegian exports to the UK are down, as Kollsnes outage is extended once again – impacting Langeled by -9.5mcm. Oil prices have risen substantially this morning. Supported as API show lower US crude stocks along with yesterday’s bullish news from OPEC.
Thursday 27th July 2017 - UK Gas prices have fallen this morning, on the back of a balanced NBP system and strong Russian flows. Next week’s weather outlook is missed and unsettled, with temperatures expected below average most days. Norwegian exports to the UK have increased 6mcm day on day this morning. We have also seen an increase in South Hook nominations, as we are expected to receive a cargo before month end (Shagra 29/07/17). Russian flows have increased strongly this morning, with TAG operating at 90% availability, these flows are also likely to increase as the week goes on.
Friday 28th July 2017 - NBP prices have opened around the same levels of yesterdays close. The UK system has opened 1.5mcm long, with demand pegged at 16mcm below seasonal normal demand. Maintenance at Dimlington has finished today, Britannia continues and Bacton Seal maintenance is expected to start Monday. Norwegian exports are down, as Kollsnes has updated with an extra 3mcm offline. Oil has again risen this morning, as it continues to react to declines in US inventories and OPEC efforts to curb production.
31st July 2017 - NBP prices have opened strongly on Monday morning. The UK System opened around 31mcm short, with demand pegged at 178mcm, 15mcm below Seasonal Norm. Bacton SEAL maintenance has started today with roughly 14mcm of restriction to flows. Brent Crude futures has seen strength over the weekend with prices climbing to a 2 month high with the threat of the US placing sanctions on OPEC member Venezuela.
- Market Comments August
Tuesday 1st August 2017 - NBP Gas prices have opened lower on Tuesday morning despite a marginally short UK system. The UK system opened 3mcmc short, with demand 13mcm below Seasonal norm at 170mcm. Increases in LNG send out, with South Hook nominating 25mcm and LNG Cargo Al Samriya confirmed for 7th August. Bacton SEAL remains in maintenance with UKCS flows reduced by 25mcm. Oil has climbed overnight with US Crude stock falling below 2016 levels which has reduced the threat of global supply.
Wednesday 2nd August 2017 - Centrica announced it would begin withdrawing cushion gas from the Rough storage facility this winter which will provide security of supply for one more season. This morning, prices are a touch softer on the curve but down more in the spot with the system being slightly long.
Thurday 3rd August 2017 - UK Gas prices have increased this morning, on the back of a short UK system and uncertainty around the Kollsnes outage.
Friday 4th August 2017 - UK prices have opened higher this morning, on the back of a short UK system. The NBP system has opened 10mcm short this morning. UKCS flows are lower due to maintenance at Vesterled. South hook nominations are also down this morning, but could increase to help balance the system. Oil prices have dipped this morning, on the back of rising output from the US and OPEC.
Monday 7th August 2017 - UK Gas prices have increased this morning, with the main driver being a short system. The NBP system has opened 22mcm short. UKCS flows continue weak, on the back of ongoing maintenance. Langeled flows have decreased, whilst Vesterled flows have increased by 8mcm due to the Heimdal outages (12.4mcm capacity loss). Oil prices have fallen this morning, however they are still around the 9 week high point. Prices are supported by strong US jobs data, a coup attempt in Venezuela, potential supply issue from Libya and slight falls in US rig counts.
Tuesday 8th August 2017 - UK Gas prices have fallen this morning, as the system appears near balanced and Oil prices lower. Cooler weather for the UK should subside over the weekend, as warmer weather conditions are set to return. The NBP system is only 4mcm short this morning. Langeled flows have increased today, despite Heimdal’s ongoing unplanned outage. Oil prices have fallen, following a recovery in output from Libya’s largest oil field, along with doubts around whether OPEC led production cuts continue to drag.
Wednesday 9th August 2017 - UK Gas prices have increased this morning, on the back of a short system. Below seasonal normal temperature levels are expected for the next few days in the UK, however over the weekend and early into next week it is expected to turn warmer. The NBP system opened 8mcm short, however this has already increased to around 14mcm short. UKCS flows are lower this morning, due to ongoing maintenance and an unplanned interruption to Bacton production. Oil prices have fallen this morning, despite a larger than expected drop in US Oil inventories. However doubts are still floating around whether OPEC have the ability to limit supply.
Thursday 10th August 2017 - UK Gas prices have risen today, despite a long system and higher Russian flows. The NBP system opened 11mcm long this morning. Following the end of the outage at Cygnus field, Bacton flows have increased, which pushes UKCS flows up marginally day on day. Langeled flows have also increased, despite the ongoing outage at Heimdal. South Hook nominations have dropped this morning, even though two LNG cargoes are expected towards the end of August. Oil prices have increased this morning, as US figures have shown a more than expected decrease for US Crude inventories. There is also an OPEC report due today, which could impact the market.
Friday 11th August 2017 - UK Gas prices have opened lower this morning. Oil prices have fallen over a dollar, with the decline starting yesterday afternoon. This fall is following OPEC’s report of increased production yesterday. The NBP system has opened balanced this morning. UKCS flows are up slightly, along with higher IUK exports today. South Hook nominations are down today, despite 2 cargoes expected towards the back end of August.
Monday 14th August 2017 - The system opened 7mcm with demand 18mcm below the seasonal normal. This has been driven by high Norwegian imports and slightly higher UKCS production. It’s worth to note that Langeled imports to Easington is nominated at 51mcm but actual flows are currently 45mcm. LNG send-out from South Hook terminal in Milford Haven is nominated to flow at 12mcm today - two cargoes are expected before the end of the month, with the first Qatari vessel on the 18th August.
Tuesday 15th August 2017 - The UK system opened 6mcm long this morning, with demand at 175mcm, a total of 18mcm below seasonal normal. Norwegian imports remain high compared to last week and South Hook nominations climbed from 12 to 16mcm this morning on expectation of another cargo this week. The far curve has weakened this morning as Brent Crude continues to fall. A strong US Dollar and concerns about Chinese demand for Oil caused a slump in prices on Monday. China is the 2nd largest Oil user and a reduced demand by the country will lead to issues of global supply. The unplanned outage at Heimdal in Norway, ended yesterday boosting supply outlook to the UK.Temperatures in the UK are expected to sit below seasonal normal this week with breezy conditions expected towards the back end of the week.
Wednesday 16th August 2017 - The UK system opened relatively balanced this morning at just 3.3mcm long, with demand sitting 21mcm below seasonal norm. Langeled flows have fallen by 8mcm this morning due to an unplanned outage at Gullfaks which has taken approximately 7mcm from supply. An LNG Cargo is expected to discharge into the UK this week, with delivery expected on 19th August. Weakness in GBP against the Euro continues to support the far curve as Sterling dropped below 1.1000 to the Euro. The price of Brent Crude climbed during Tuesday’s afternoon session as US inventories dropped. Figures will be released later today, but it is expected that there will be a drop of over 9million barrels.
Thursday 17th August 2017 - UK Gas has risen significantly this morning across the board. Unsettled weather is expected for the next few days in the UK, with some rain and wind – particularly in the North. The UK system has opened balanced this morning (1.5mcm). Langeled is nominated at 45mcm, up around 5mcm on yesterday, despite ongoing unplanned outages at Gullfaks and an unnamed field. South Hook nominations are down this morning, despite the Umm Slal scheduled for the 19th August.
Friday 18th August 2017 - UK Gas prices have increased this morning. Unsettled and breezy weather expected for the next few days in the UK. Next week is warmer, calmer and drier, especially in the South. The NBP system has opened 8mcm short this morning. Langeled is flowing 10mcm less this morning, however this could increase throughout the day to help balance the NBP system. Oil prices rose yesterday afternoon helping push today’s prices up. This morning, they have opened sideways, however are expected to drop throughout that day amid broader market selloff.
Monday 21st August 2017 - UK Gas prices have increased across the morning, with the main driver being an extremely short UK system. The NBP system opened 35mcm short this morning, as Norwegian outages continue to reduce flows to the UK – nominated at just 22mcm this morning, they are down 13mcm since Friday. Oil prices have dipped slightly this morning, but are remaining relatively stable following Fridays highs. There is currently rising US output. Weather remains volatile for the UK, however some models are showing higher pressure meaning warmer scenarios for the UK.
Tuesday 22nd August 2017 - UK Gas prices have fallen this morning, downward correcting from yesterday morning’s highs. Weather models for the UK are largely different. However the more likely outcome is a cooler and breezier outlook. The NBP system opened 4mcm short this morning, so relatively balanced compared to yesterday. Langeled and South Hook nominations have both increased, despite Norwegian outages and no LNG cargoes expected for 2 weeks. Oil prices have lifted slightly this morning, following signs of a gradually tightening market.
Wednesday 23rd August 2017 - UK Gas prices have remained the same as yesterdays close this morning. The system has opened 11mcm long this morning, as Langeled nominations increase to 63mcm, making up for the volume lost through outages earlier in the week. South Hook nominations have reduced this morning, as no cargoes are expected for the next 2 weeks. Oil prices have remained stable this morning, as oversupply concerns in Libya and US Gasoline inventories grapple with peak summer driving season.
Thursday 24th August 2017 - UK Gas prices have risen slightly this morning, main driver again being NBP system. The NBP system has opened balanced this morning. Langeled is nominated at 70mcm, which is the reason the system is balanced, when this returns to its normal 40mcm levels, the system could struggle. Today, the pound is continuing its weakness against the Euro (8 year lows for the pound), triggered by Mario Draghi’s speech yesterday and strong European economic data. Oil prices are steady this morning, holding the gains made in the previous session after another fall in US crude inventories. There is also a tropical storm heading for Oil producing facilities in the Gulf of Mexico, which could continue to affect prices.
Friday 25th August 2017 - This morning, the system is long on the back of a further increase in Norwegian flows to the UK coupled minor gains for the pound and losses for coal. Supporting the continental market is planned maintenance on the TAG pipeline which has effected Russian flows into the EU at Slovakia, additionally, compressor failure in Libya has cut flows to Italy and the outage is expected to last through the weekend.
Tuesday 29th August 2017 - NBP Gas prices have opened strongly this morning following the long weekend, despite the UK system holding good length. The UK system opened at around 9mcm long despite nominations from Langeled dropping to 60mcm and South Hook falling to 15mcm. The Sterling has continued its recent downtrend against Euro, moving to ~1.0750 this morning helping to lift further dated curve contracts. The devastation of Hurricane Harvey has impacted Oil markets with large scale production suspensions in Texas as flooding continues. The impact of this could last several days as production slowly restarts. Wind Generation is expected to be below seasonal norm this week leading to above average power burn to offset the drop in renewables.
Wednesday 30th August 2017 - The UK gas prices have continued to climb this morning with the prompt and near contracts strengthening. The UK Gas system opened 7mcm short, with demand 2mcm above seasonal averages today. Low renewable energy is forecast for Wednesday leading to an increase in CCGT and gas burn helping to support prices. Further issues within Norwegian gas production and exporting plants resurfaced leaving most Western European gas hubs short as further capacity was withdrawn from the system. The UK front curve climbed significantly on Tuesday, amid further Norwegian maintenance beginning in September and a poor LNG outlook for the remainder of the year.
Thursday 31st August 2017 - The system opened roughly 8mcm long, with demand sitting at 10mcm below season normal as demand has eased. Langeled nominations are nominated higher at 50mcm, whilst South Hook is flowing 2mcm higher than yesterday. The UK weather forecast anticipates warmer, brighter weather for next week which is expected to reduce demand. A strong day for GBP against Euro (up 1%) ensured the back of the curve was pressured downwards with the exchange valued at ~1.0850. Brent Crude prices fell despite a 5.5million barrel draw down on US stocks. The large scale shut down on numerous refineries following Hurricane Harvey are significantly reducing the demand for the commodity.
- Market Comments September
Friday 1st September 2017 - The system is 2.6mcm long with demand pegged at 180mcm, 11mcm below seasonal normal. There has been little change in the UK weather forecast, with the beginning of next week being brighter and warmer. LDZ demand is expected to reduce on the back of this. Langeled is nominating higher today at 56mcm with South Hook down 4mcm on yesterday. The LNG outlook is still looking scarce with no vessels expected in the UK in the next 2 weeks. Planned maintenance on major Norwegian gas infrastructure begins today, with work beginning on the SEGAL pipeline restricting flow into the UK by roughly 20mcm/day. There is also ongoing unplanned maintenance on both Nyhamma and Gullfaks facilities – collectively taking approximately 10mcm of capacity offline. Brent Crude is off this this morning at around 52.40$/bbl with prices dropping off the back of refinery shut down, as Hurricane Harvey continues to drive volatility in the US oil markets
Monday 4th September 2017 - The UK system opened balanced this morning to start the week, only 2.6mcm long with demand 43mcm below seasonal average. Norwegian flows to the UK have decreased from Friday, falling from 56 to 43mcm. The Interconnector is exporting at 25mcm which has fallen from ~40mcm on Friday which has offset the fall from Norwegian supply. Brent Crude ticked upwards on Friday and is currently priced at around $52.30bbl helping to support the far curve. Temperatures in the UK are expected to fall this week with windier conditions set to increase renewable energy generation.
Tuesday 5th September 2017 - The UK system has opened short this morning, holding a 6.2mcm deficit to demand. Prices have opened up today compared with yesterday’s close, with prices lifting across the curve. The near curve is up on planned maintenance in Norway impacting flows to the UK whilst the Interconnector is exporting 12mcm higher than yesterday. A depreciating Sterling is helping to support the far curve. Brent Crude prices climbed on Monday afternoon due to significant increase in demand, following the start-up of some US refineries in the Texas area following Hurricane Harvey. The temperatures in the UK are predicted to sit a lit cooler, helping to increase gas demand. Wind generation is forecast high until Friday which could help to reduce some CCGT and gas demand for Power generation.
Wednesday 6th September 2017 - The UK system opened ~15mcm long this morning, with increased flows nominated from Langeled (Up to 52mcm) and an increase in Russian flows (401mcm). Despite good length in the system, prices have continued to climb this morning fuelled by cooler, more unsettled temperatures lifting the LDZ demand in the UK. Prices on the back of NBP market were supported on Tuesday by a significant increase in the Carbon and emissions prices with Dec-17 EUA’s climbing by approximately €0.55. Upcoming temperatures in the UK have been revised downwards overnight, expected to last for at least a week, likely to bring an increase in heating demand.
Thursday 7th September 2017 - The UK market opened with short system (-12.2mcm), however this was balanced relatively quickly and is currently ~10mcm long. Increases in Russian flows to 413mcm have helped to bolster European supply helping to balance. The UK gas prices remained in line with yesterday’s close upon open, but has since seen losses on the front end as the system moved long. Weather forecasts were again revised down with unsettled and windy weather expected to bring temperatures up to 1-2°C below seasonal norm. Further out on the curve, prices have been pressured by a slightly weaker Oil price as Hurricane Irma threatens to restrict shipments around the USA.
Friday 8th September 2017 - Gas prices have risen substantially during the last couple of weeks. Continued problems with the French nuclear reactors means that gas- and coal fired generation must compensate for the missing production. This also means that the link between coal and gas prices have strengthened lately and coal seems to be in the driver seat. Bullish sentiment from coal spills over into the gas market and even though gas prices ended marginally down yesterday the underlying sentiment stays strong. This morning coal sets new highs and gas edges up as well. As such the fundamentals are not strained but the bullish sentiment in the general energy complex is simply too strong for gas prices not to rise.
Monday 11th September 2017 - UK temperatures are expected to be colder this week, however warmer revisions are expected for next week. The UK system opened at 19mcm long this morning, however this is already dropping. Langeled flows are at just 40mcm today, whilst FLAG flows are also low. Oil prices have risen this morning, as the Saudi Oil minister discusses possibilities to extend a pact to cut global Oil supplies beyond March 2018 with Venezuela and Kazakhstan.
Tuesday 12th September 2017 - No real changes to the UK temperature forecasts, with below seasonal normal temperatures expected for the next couple of weeks. The NBP system has opened balanced this morning. LDZ consumption has increased. Flows from Entry SEGAL are still reduced, leading to lower St Fergus flows. Oil prices are steady this morning, as Hurricane Irma reduces demand, whilst refinery restarts are set to lead to an increase in Oil demand.
Wednesday 13th September 2017 - Minimal change with temperatures in the UK, however LDZ consumption is expected to fall next week as temperatures are forecast to rise. The NBP system has opened balanced this morning – slightly short. UKCS nominations are lower today, due to lower St Fergus flows. Langeled flows are also down 4mcm to 38mcm. The Rasheeda LNG Vessel is expected to arrive at South Hook on the 18th September. Oil prices have softened this morning, as reports state that US crude stockpiles are rising. Decreases are not drastic, as OPEC said it’s expecting higher demand for crude next year, limiting any losses.
Thursday 14th September 2017 - LDZ consumption is well above seasonal norm, though this should fall off from mid-next week. CCGT demand is also is also up day on day. The NBP system has opened long this morning (7mcm). IUK exports have decreased from yesterday’s levels. UKCS nominations are slightly higher today, as we see higher St Fergus flows – this is as the capacity loss at Entry SEGAL has reduced. Strong Power and Carbon prices are adding weight to the curve, despite a long system. Oil prices have eased slightly this morning, but have held onto most of their gains as expectations of firmer Oil demand limit any losses.
Friday 15th September 2017 - UK temperature forecasts are looking warmer, and also predicting a lower LDZ stance. The NBP system has opened 11mcm short this morning. Increases in Bacton flows have pushed UKCS nominations upwards. Langeled flows have increased to 56mcm, as the pound appreciates against the Euro, increasing the NBP’s premium over the continent.
Monday 18th September 2017 - The selloff that began Thursday afternoon continued into Fridays trading and by the end of the day most contracts on the NBP had moved more than 1.5 p/th down, while movements on continental hubs were close to ½ €/MWh. A stronger pound helped UK gas fall more than its continental counterparts. The pound is back to the same level as in June, and markets are pricing in a 64% chance of a UK rate hike in November. Gas was down with coal and carbon, that also started to show weakness Thursday afternoon, and continued the slide on Friday. There wasn’t a lot of news out, but the market has just risen so much, that it was time for a correction. This morning the system is heavily short, and the prompt is up. Higher demand and lower supply is the reasons behind this. For the curve, the market is slightly down, with coal being off another 50 $cent compared to the close on Friday. As we have reiterated a few times now, the market was in for a correction at some point, but also that the size of this will be limited if we don’t have clarity about the French nukes and what the carbon market reform will look like.
Tuesday 19th September 2017 - Gas prices rebounded yesterday after a sell-off the day before. High demand and dropping supplies have kept spot prices well above those of the front month, however expected improvements in supplies has meant a narrowing of the premium of spot vs. the October. the gas curve made gains in the UK driven by a drop in the pound and from sentiment in coal and the power sector while continental gas was very little changed due to gains in the euro. This morning gas prices are dealing slightly lower on the back of a balanced system, despite a few more days of major maintenance work in Norway and Russia which is holding back a dearth of gas, over 100mcm respectively.
Wednesday 20th September 2017 - For the beginning of October, Power burn has been reduced, following higher wind generation as a result of Hurricane Maria. The NBP system has opened balanced this morning. IUK exports have increased again, following the return of Langeled flows. Oil prices have increased this morning, as Iraq and other producers consider extending the supply cuts to ease the global supply glut, there has also been a smaller than expected increase in US inventories.
Thursday 21st September 2017 - This morning, the system is short 15 mcm on a surprise dip in flows from Norway and an increase in exports along the Interconnector to the Continent. Regardless, prices are down in early trading on the curve as coal has retraced a dollar and power prices are coming under early pressure.
Friday 22nd September 2017 - Gas prices dipped yesterday in both the UK and on the continent moving down marginally, following a generally bearish mood in the coal and power markets which lost ground after a bounce the day prior. Flows from Norway and Russia have begun to improve which have also put downward pressure on gas prices. This morning, the system is marginally long and gas prices on the spot are offered lower than yesterday's close. Coal and oil prices are mostly flat day on day in early trading while power prices are being dealt lower which should apply some further pressure to gas.
Monday 25th September 2017 - There have been colder revisions to the UK weather model, with both LDZ consumption and Power burn both showing increases. The NBP system has opened balanced this morning. Langeled flows have increased to 50mcm, up 5mcm. LNG send outs are also nominated higher. Oil prices have received some pressure from a stronger dollar, but most of the gains from Friday have been kept as major producers in Vienna have said the market is on its way to rebalancing.
Tuesday 26th September 2017 - The NBP system has opened 13mcm short this morning. Lower St Fergus flows have decreased UKCS nominations, and Langeled flows have fallen 12mcm. Oil prices rose to a 26-month high yesterday, causing volatility – this was caused by Turkey’s threats to cut crude flows from Iraq’s Kurdistan region to the outside world. This morning they have stabilised. Models have revised UK LDZ consumption down, in line with an expected warmer forecast for next week.
Wednesday 27th September 2017 - Gas prices fell yesterday, despite a short spot market which lasted throughout the trading day. Contracts were dealt lower following a retracement in crude prices coupled with a sharp drop in coal. The European energy complex was bearish across all products with power and carbon taking a hit along with oil, coal and gas. This morning the system is balanced, coal and power are being dealt lower and gas has traded down slightly in early, thin volume. A strong increase in wind power production over the coming days should weigh on spot prices for UK power and translate into lower demand for gas from the power sector, excess volumes will be used to replenish medium range storage stocks.
Thursday 28th September 2017 - Gas prices came down yesterday morning but recovered into the afternoon to post modest gains day on day in both the UK and on the continent. Gains were made as demand is expected to slowly rise with falling temperatures into the next week. Across the broader energy markets prices fell in power, emissions, coal and oil respectively. This morning, the UK market is short almost 10mcm, as demand creeps up and supplies dip and exports remain at the high end of capacity across the interconnector. Despite this, prices are down slightly, following the broader energy complex to the downside, including oil and power with coal offered at the level of the close buy still untraded this morning.
Friday 29th September 2017 - Gas prices were little changed yesterday, after trading above and below the previous day’s close. In the early afternoon, the French nuclear watchdog, ASN, announced the surprise closure of 4 French reactors which caused a spike in gas prices before the market sold most of the rally off into the close. Power prices were more mixed with news being bullish and a large drop in coal and a weak Nordic market being bearish. This morning, the system is long, flows have dipped slightly with demand that has been lowered with an increase in renewables generation. In early trade action the market is unchanged from yesterday's close, oil is down slightly which the rest of the Europe energy complex is unchanged.
- Market Comments October
Monday 2nd October 2017 - Gas prices sank on Friday, dragged down by the within-day contract on the NBP and spot prices on the continent. Coupled with the weakness in delivery, a result of robust renewables production, the curve was also down on the back of a sharp drop in coal and power with oil losing only modestly. This morning, gas is trading flat to the Friday close despite a system that is marginally short, 6mcm. Oil is down slightly, while the pound has made some early gains over the euro. Power is trading flat to the close in thin volume so the market will need some more time to find its direction today. Forecasts show warm temperatures and strong wind for the next couple of days before both drop, which will support prices.
Tuesday 3rd October 2017 - Gas prices rebounded yesterday, on the back of a short system and an almost $2 move in coal. The rebound was tempered by falling power prices in Europe despite modest gains in power prices in the UK. This morning, the system has opened long on an increase in supply and gas prices are under early pressure from lower prices in coal, power and oil. In the oil market, OPEC production has been shown to have increased with the return from outage of a large field in Libya, while US rig counts have increased for the first time since August. There are few outages, planned or unplanned currently so the market is most focused on the French nuclear outlook and the weather.
Wednesday 4th October 2017 - Gas prices were whipsawed yesterday starting the session lower before making gains and closing up on the day. Gains were driven by a bounce in the coal price which took power and gas up with it while spot prices made gains on strong buying interest from storage players, oil was mostly flat on the day and provided little sentiment or direction. This morning, gas prices have started out the day down slightly from yesterday's close dealing lower on both the UK's NBP and in continental markets like the NCG and TTF. German power prices are also down in early trade, on the back of a modest improvement in expected wind production which could also prove bearish for gas later this week.
Thursday 5th October 2017 - Gas prices were little changed yesterday in the UK with modest gains at the front of the curve and small losses at the back. On the continent prices ended the day in positive territory but the gains were minor, spot prices were more definitively lower. The direction in the gas markets was challenged with losses taken in oil offset by gains in coal. This morning, the gas market is up in early trading following on the gains in power as reports of further nuclear delays have come out in France. German power is up half a euro on the front month while in France the November is up over 2 euros. This bullishness in the power sector will filter into the gas market as lower nuclear baseload availability must be filled with gas.
Friday 6th October 2017 - Gas prices rallied yesterday, driven up in both the UK and on the continent by news of some new Norwegian outages and further French nuclear issues. The broader energy complex fed the bullishness in gas with power making gains in all the European markets, while coal was flat and oil pushed higher. This morning, the UK system is a whopping 34mcm long as higher prices brought on a surge of supplies and wind power cut into demand, with the Interconnector exporting 20mcm the market will have to store the gas or increase exports. Temperatures are expected to remain slightly above normal for the 15-day period with wind production above normal on balance.
Monday 9th October 2017 - Gas prices were mostly unchanged on Friday, despite a long system (almost 40mcm at the start of trading), increased flows from Norway and a sharp drop in oil and coal prices kept a lid on price moves. The oversupply of gas to the UK was sent into high-cycle, medium range, storage which rebounded from 60% full to 84% full. A gaining euro against a weaker pound put slightly more downward pressure on continental hubs while supporting the UK. This morning, Gas is offered at the closing level from Friday in the UK and up slightly on the continent. Oil and coal prices are mostly unchanged as well from last week so the market is searching for direction. The power market is flat as well with only the Nordic market slipping on increased hydro production.
Tuesday 10th October 2017 - Gas prices moved in two directions yesterday as the curve was split between two different sets of inputs. The front of the curve, spot, front month and front quarter all rallied on a cut in flows from Norway and the planned Norwegian maintenance that begins today on a key pipeline to the UK and later this week to a large processing plant so flows are expected to fall further. The back end of the curve fell slightly on weaker coal prices. This morning, the system is 30mcm long despite the cut in flows as the wind has picked up and has removed almost 30mcm of demand. Excess gas will likely be injected into storage to weather the further cuts in supply coming this week. Prices are off slightly in early trading this morning on the oversupply and on a modest drop in coal and power prices.
Wednesday 11th October 2017 - Gas prices softened up yesterday on the back of a long system in the UK and high wind power output that cut demand and bolstered supplies on the spot. Excess supplies were sent to storage and exported to the continent pressuring the front end of the curve downward while gains in oil, coal and carbon credits provided some support to the longer dated contracts. This morning, the market is experiencing the large cuts in supplies from Norway as the Kollsnes processing plant goes down for maintenance, despite the short term corrective works, the system is again long today as the UK enjoys above normal temperatures for the time of year coupled with robust power production from renewables. Gas is trading around flat to the close in early morning action while, the broader energy market is up slightly.
Thursday 12th October 2017 - NBP gas prices made gains yesterday across the curve on the back of the moves in coal and oil, coupled with a falling pound against gains in the euro. By contrast, the price of the continent was mostly unchanged to slightly down on the currency move. Spot prices for gas were down across all markets, despite a massive cut in flows from Norway due to maintenance at the Kollsnes processing plant. The system remained long, in the face of the supply shortfall due to low gas demand; a result of mild temperatures and high wind output. This morning, the system is again long on the return of Norwegian supplies and exports will have to take place to balance the UK with the Interconnector sending gas to storages on the continent.
Friday 13th October 2017 - The DA in the UK was sent over 1 p/th down yesterday as Norwegian supply returned from maintenance. The effect on the continental hubs was not as pronounced. Strong coal countered the weak front and kept the curve from falling. This morning coal is up again and so is oil. Fear of a possible intervention by Iraqi forces in northern Iraq has sent the oil up almost 1 $/bbl. This is bullish European gas, but a stronger pound on renewed hopes for a Brexit transition deal is keeping UK gas in check.
Monday 16th October 2017 - Gas prices moved in two directions on Friday, driven by moves in currency, with the UK's NBP taking on losses with a stronger pound while continental markets, denominated in euros made minor gains. Strength in coal and oil seemed to have little knock-on effect in the gas market despite driving European power prices upwards. This morning, the system is almost 30mcm long and spot prices have been driven downwards as the market will look for somewhere to put the gas. In the UK short term storage has been filled to capacity so excess gas will have to be exported to the continent. Renewables production should peak today before tapering slightly which will provide a bit more demand for gas from tomorrow.
Tuesday 17th October 2017 - UK Gas prices sank in the spot yesterday after the system opened the day 30 mcm long and struggled to find a home for the excess gas with length in volumes continuing into the close of 15 mcm. By contrast, curve trading was bullish in both the UK and on the continent following on the gains in the coal market as gas is becoming the more favoured power generation source, gains in coal cause traders to switch to buying gas driving up the price. This morning, forecasts on the continent have become slightly cooler while the UKJ outlook remains mild despite a return closer to normal. Wind output is expected to drop off a bit into tomorrow which should support price while another small gain in coal is supporting the curve with prices mostly unchanged.
Wednesday 18th October 2017 - Gas prices inched lower yesterday, following the broader European energy complex and particularly coal which ended the day down. Mild weather and robust renewables pressured spot price on the continent while in the UK a dip in wind production provided gains for the spot. This morning, prices for gas are bid on flat to the close, or unchanged, the system is balanced with demand rising on lowered wind production and slightly cooler temperatures. The UK remains in export mode to the continent via the Interconnector and high cycle storages are close to full. The weekly US crude oil and products data will be out later today and estimates are calling for a large draw in oil from storage, the oil market has moved higher on the forecasts and will await confirmation.
Thursday 19th October 2017 - Gas prices moved higher yesterday, driven by moves in the coal and power markets while demand for gas was little changed. Coal prices continued to move higher dragging p the price at which gas and coal will compete to be used for power generation. Higher coal prices mean that coal will lose market share if gas does not also move up to keep the balance. Early into the winter season, traders will be cautious to sell the gas down with the risks of the French nuclear situation and the possibility of coal weather looming. This morning, the system is again long as renewables generation, wind, has picked up and displaced some gas demand and spot prices are a touch softer. On the curve coal is again up on Chinese demand for winter stocking which is pushing up power and gas.
Friday 20th October 2017 - The continued problems with the French nuclear fleet has caused a lot of tension in the European Energy markets and generally supported both gas, coal and power prices. Coal has further been affected by healthy Asian demand and pricewise risen much more than gas. With a warm start of October and high Russian import fundamentals in the gas markets are strong. Prompt prices trade substantially lower than the forward market and the elevated levels will be difficult to justify unless spot prices starts to outturn higher. These facts have made it difficult for gas to follow the underlying bullish sentiment in coal and with LNG on its way to both France and the UK gas prices have come under pressure. Today’s sessions start out unchanged but downward pressure seems to build.
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