Market Comments January
Tuesday 2nd January 2018 - Gas prices dropped on the last day of trading in 2017 driven down by a falling spot price, a consequence of oversupply and weak demand. This morning, the system is 40mcm long a combination of a minor drop in demand coupled with increased flows from Norway and a large increase in flows across the interconnector. Very little has traded yet with prices mostly unchanged from the previous session.
Wednesday 3rd January 2018 - Gas prices started a new year of trading with a minor retreat in the UK driven down by the front end of the curve, the spot market, where an oversupply of 40mcm depressed prices. Gas prices on the continent were mostly unchanged as traders torn between falling oil prices and a rally in the coal market. This morning prices are mostly unchanged as traders eye the risk of a cool down in temperatures over the coming weekend.
Thursday 4th January 2018 - Gas prices were slightly lower yesterday, on the back of a long system and a minor retracement in coal prices. Any further sell-off was held until traders can become more confident about the weather forecasts for next week, taking into consideration the extent and duration of the cooler temperatures of any cold snap. Today, prices are slightly lower at the front end of the curve as the weather forecasts have turned a touch warmer from yesterday. Gas is also receiving some support for longer dated contracts on fresh highs in oil.
Friday 5th January 2018 - While the DA was up on NBP as we are heading into colder weather, the monthly forward contracts were down, as the cold weather seems to be short lived, and temperatures point to mild weather from end of next week in the UK. This morning we are further off as the warm up has been confirmed, and as the system is slightly long despite a significant drop in temperatures since yesterday in the UK especially.
Monday 8th January 2018 - In spite of a cold snap over the UK, the weather for Nord Western Europe looks mild for the season. This was bearish the overall European gas markets on Friday. It was the front that took the lead in the bearish market, but Brent oil was also off and a stronger pound helped the curve in the UK down as well. Coal on the other hand was a bit stronger, but the weather and oil prevented the gas market from going up. Not a lot has changed during the weekend, but weather forecasts have turned a tad colder for Europe. With the slightly colder weather, a bit of upside to the front can be expected, the last couple of weeks decreases taken into consideration.
Tuesday 9th January 2018 - Temperatures have dipped over the last couple of days both in the UK and on the Continent. Levels are currently below seasonal normal in the UK and around normal on the Continent. It’s basically the first time this winter that the market is experiencing situations with below normal temperatures and demand makes the short end of the market tighter. Despite fundamental strength in the short end players didn’t seem worried about the situation in yesterday’s session and prices ended sideways. Late yesterday an earthquake in the Groningen area was registered, this together with colder forecasts compared to yesterday makes the gas markets open stronger.
Wednesday 10th January 2018 – Yesterday was bullish for European gas markets. Weather forecasts were colder yesterday, and the news from late Monday about the Groningen earthquake continued to support the market through yesterday’s trading. Reports of a big drop in US oil inventories sent the oil to new highs. This morning gas is off with slightly warmer weather and a long system. Coal is also coming off, adding to the bearish sentiment, but it’s too early to call and end to the bull ride for coal. Oil stays strong, limiting the downside for the curve.
Thursday 11th January 2018 - Yesterday the markets opened slightly below Tuesdays close, as the weather was a bit warmer and coal was off. But around noon, NAM, the operator of Europe’s largest gas field, Groningen, issued a statement saying they would propose production cuts at the field because of the earthquake Monday, that was the largest since 2012. Gas prices shoot up on this on the whole curve. But longer dated products were up, and stayed up, closing over 1 p/th up for some seasons in the UK, and about 0.25 €/MWh for calendar products on the Continent. This morning the front is up a bit, but not higher than where we traded yesterday. The system is significantly long. The direction of the curve will be very much dependent on if or what information the market will receive today about the proposed production cuts.
Friday 12th January 2018 - NAM, the operator of the huge Groningen gas field, has suggested to the Dutch regulator, to lower gas production by around 10% without giving any further specific details. The market took this fairly calm yesterday, and with lower coal and a late slump in oil, curve contracts on the continent traded down. In the UK, a weaker pound countered the bearish coal and most contracts closed unchanged. This morning a change in weather forecasts are sending the front end of the curve on the move. It looks colder in today’s forecasts, and the American weather model points to a significant cold spell over most of Europe. The European weather model is not as bullish, but this is enough to send the European gas markets significantly up. Coal is also up this morning, but oil is coming off after having traded just above 70 $/bbl yesterday. We are currently at 69 $/bbl on front month oil.
Monday 15th January 2018 - Gas prices improved on Friday, following forecasts for a prolonged cold snap coupled with increased prices for both coal and crude. This morning, the world looks a little bit different, forecasts have moderated and the system is long 26mcm. The length is mostly due to flows from the continent across the interconnector which were priced in on Friday when traders expected colder weather. The reversal in temperatures has crushed prices this morning with the front month trading down 2p in the UK and 50 cents on the continent. Coal is trading unchanged, oil is down a touch and power is down with gas and weather.
Tuesday 16th January 2018 - Yesterday the gas market was oversupplied in the UK, this coupled with a revised forecast for more mild temperatures sent prices down, despite the minor gains in coal and oil. This morning, the system is again long by almost 30 mcm, despite increased demand and a drop in supplies from Norway, the interconnector flows to the UK have increased to 41 mcm which accounts for all of the excess gas in the system. The power markets are up on a slightly cooler weather run and it is expected that the markets will retrace some of the yesterday's losses if further forecasts confirm the cooler expectations.
Wednesday 17th January 2018 - Gas prices came under pressure yesterday, following a retracement in both the oil and coal prices and on the back of a very over supplied system. This morning, prices are being dealt lower again after weather forecasts have been revised warmer and windier for the UK. Coal prices are down as well in early trading, while oil is stable as experts predict a further draw in US stock piles this week.
Thursday 18th January 2018 - Gas prices relaxed further yesterday in both the UK and on the continent, driven down by warmer and windier forecasts coupled with a long system and dip in the price of coal. This morning, the fight continues as the back end of the 15-day forecasts has been revised warmer across Europe with NW Europe seeing the most pronounced change. Stocks are in good shape for the time of the year posting a surplus to 2017 and trending towards the 5-year average, imports from Russia have dropped back as power supplies from hydro and nuclear sources have surged and pushed gas fired generation out.
Friday 19th January 2018 - Gas prices were distributed marginally lower yesterday, on the back of mild forecasts and a comfortably supplied system. The drop may have been larger if not for a number of outages announced to the market by Norwegian firm GASSCO, the unplanned outages are expected to very short term in nature but were crucial in slowing the downward slide. This morning, prices are mostly flat to Thursday's close as some short sellers are likely taking profit after 4 days of sell-offs. The weather forecasts have been revised warmer at the back end of the 15-day outlook, while coal, carbon and power are making minor gains in early trade action.
Monday 22nd January 2018 - Prices for gas were unchanged on Friday as mild weather was expected to arrive on Monday while a number of unplanned outages cut production and supplies to Europe. The broader energy complex was mixed with crude taking losses while coal made gains and power prices were mixed. This morning, the system is short on a dip in flows from Norway to the UK and a reduction in flows from the continent. Prices are mostly unchanged in very early trade action.
Tuesday 23rd January 2018 - Gas prices retraced some of last week’s losses on Monday after a easy start. The weather forecasts came in colder around mid-day sparking a bit of a rally on the remaining months of the winter, February and March, while gains on the rest of the curve were more modest. This morning, the system is long on mild weather and an up-tick in wind power production. in the UK demand has fallen by 31 mcm while supply is down around 10 mcm. Broadly flows are very stable and the year over year volume of gas in storage is growing. Oil and coal are both up this morning as is gas and power, save for Nordic power with is a touch softer on increased precipitation.
Wednesday 24th January 2018 - Gas prices fell yesterday. Prices climbed in the morning at the front end of the curve on the morning weather forecasts, however, by midday, forecasts updates indicated temperatures may not fall below normal and the market reversed sharply. This morning, gas prices are being dealt lower in early trade action on the back of balanced system and neutral forecasts, coupled with softer oil and coal.
Thursday 25th January 2018 - Gas prices continued to move yesterday despite a rally in oil which took the commodity to new highs. The system was comfortable supplied while temperatures remained mild and wind power output robust. Additionally, power and coal were also traded lower which added to the bearish sentiment on the gas markets. This morning, the system is long on the back of increased flows across the interconnector despite a large drop in receipts from Norway which have been diverted to the continent. Prices have rebounded slightly after yesterday’s sell off as some short sellers have taken profit on the move ahead of a return to normal temperatures next week.
Friday 26th January 2018 - Gas prices were varied yesterday with the UK closing mostly unchanged while the continental markets took on some minor losses, the primary drive for the divergence in trade direction was currency with the euro strengthening against its peers, the pound and the dollar. This morning, that move, cooler forecast runs and a sharp drop in wind output have pushed up gas prices in the UK and on the continent, despite a long system. On February 1st the markets will get news on any changes in the production caps for the Dutch Groningen gas field.
Monday 29th January 2018 - Gas prices were distributed lower on Friday, with only the balance of winter months contracts, February and March, making gains day on day. Prices were softer as the mood for traders remained bearish on the back of a well-supplied market with mild weather conditions and sideways peripheral markets. This morning, the system is long as supplies have picked up after unplanned maintenance more than the expected increase in demand from cooling temperatures. Oil prices are flat from Friday, while coal and German power have kicked off the week stronger, gas is following their lead and is also stronger. The February contract is set for expiry and some support will come from short sellers buying back or rolling positions before the contract goes into delivery.
Tuesday 30th January 2018 - Yesterday prices for gas closed lower, despite starting the day in positive territory. The broader energy complex came under pressure with oil and coal taking on loses of over a dollar each, that coupled with a long system sent the gas tumbling down through the day to close in the red. This morning, gas prices are in positive territory in early trading as the forecasts have come in a touch cooler than yesterday and as traders take some profit from short positions. Oil is off slightly in early trade action while coal is mostly unchanged.
Wednesday 31st January 2018 - The gas market dropped yesterday, driven down by a long system, moderating forecasts and a softer energy complex. Weakness in coal and the sell-off that occurred was quite stunning with the price falling almost $2.25/ton on the front calendar contract. The move in coal had only a slight impact on the gas market which has been falling since the start of the new year, in fact forward winter contracts made gains yesterday in the face of the bearishness of competing fuels, speculators are likely buying ahead of the Gronening announcement on Thursday. This morning, prices have shot up as the forecasts have turned decidedly colder, with temperatures expect to drop below normal next week. The system is long for today, but will carry little weight against the change in temperatures expected. Us crude stats for this week suggest the first build in stocks this year.
Market Comments February
Thursday 1st February 2018 - Gas prices roofed yesterday, marking a sharp blow with the downward trend that began with the start of the new year. The rally has been sparked by a forecasted drop in temperatures across Europe and the UK for the first week of February, the colder weather is also accompanied by a fall in forecasted wind which will require more gas for power generation. This morning, the system is long, as supplies from the mainland and from Norway flood the UK. The Groningen announcement is expected today and traders have been covering positions ahead of the news. Coal has lost about $4 over the last couple of days which should help to keep it competitive with gas.
Friday 2nd February 2018 - Prices for gas were dealt lower yesterday, after a rollercoaster of price movement after the Groningen announcement. The Dutch Government has recommended a cut of 50% to production with closure of some minor fields as soon as possible, the final decision will be left to the respective minister. The market rallied initially on the news selling off shortly after. Falling coal prices have lowered the fuel switching point between the competing fuels and given a bit more room to the downside. This morning, the system is stable, forecasts are slightly warmer on the continent and a touch cooler in the UK. Prices are up slightly from the close, coal is down while oil is up.
Monday 5th February 2018 - Gas prices closed last week slightly lower dropping with oil and power, despite a jump in coal and cooler forecasts. This morning, the system is long on increased flows from both Norway and the continent despite a jump in demand, attributed to cold weather and very low wind power output. Energy prices are down across the complex with power, carbon, coal and oil losing value. Energy market sentiment is being driven by a rise in forecast temperatures next week and overall bearishness in markets generally, stock markets have had their worst week since the start of the year and continue to lose ground this morning.
Tuesday 6th February 2018 - Gas prices were dealt lower yesterday, following the wider commodities and equities complex which saw oil, coal and power all trade down while stock markets globally took a beating. Additionally, a change in forecasts from below normal to rising temperatures next week compounded the bearish sentiment. This morning, the bears remain in full control as the market is seen to open further down. The system is long despite the cold weather as expectations of more mild weather have compelled storage operators to sell off stocks ahead of further spot price declines. Global equity markets have been further battered and some of this sentiment is filtering into the energy markets via oil and coal prices.
Wednesday 7th February 2018 - Gas prices made gains yesterday in the UK on the back of a weakened pound and a switch to a cooler prognosis for the 10-15-day period of the forecast. The continent was buffered from most of the move due to a stronger euro, making imported gas cheaper. This morning, the system is again long as demand begins to wane and supplies remain unchanged, wind output is also expected to increase. The market will remain very focused on changes in weather as forecasters line up with prediction for how February and March will develop.
Thursday 8th February 2018 - Gas prices were up and down yesterday after the mid-day announcement of a stop in flows on the Forties pipeline. Intraday gains of 2-3 pence/therm were seen on spot and front month prices, however later in the session an announcement was made that Ineos expected to restart the system overnight and prices were sold back down. This morning, the system is long despite the loss of flows on a drop in demand and an increase in wind output, forecasts are slightly milder today vs. yesterday, however, the change is negligible. Ineos has said in a press release that the restart will take until Friday morning, flows have risen marginally from the bottom.
Friday 9th February 2018 - Gas prices recoiled yesterday day after the bears took control of the broader energy markets dealing oil, gas, power and coal to the downside. Coal was the hardest hit losing over $3 on the day, a bearish signal for gas as the competition between the fuels for power generation heats up. This morning, the system is short as flows to the UK have been turned down with a fall in demand. A few lasting outages have also cut supplies to the UK adding to the shortfall. In early trading the market is up modestly in response to the tight spot market and a minor bounce in coal, mixed power markets and flat oil, the stock markets continue to correct from recent highs.
Monday 12th February 2018 - Gas prices went madly off in two directions on Friday with UK gas rallying while prices on the continent were distributed lower, this was on the back of a drop in value of the pound against the euro. This morning, the system is long, coal and oil have rebounded but gas is trading down slightly from Friday’s close as the commodity aligns itself with the moves of it peers from last week and on generally bearish weather forecasts.
Tuesday 13th February 2018 - Gas prices made improvements yesterday, following colder forecasts to the upside. This morning, the system is long, on the back of robust wind output and mild temperatures, it would be hard to tell this was the case as prices have roofed in early trading on a forecasted cold snap expected to begin around the end of the month and possibly continue into March. The arctic bomb has got traders covering shorts and taking longs in anticipation of a possible polar vortex and a plunge into a massive deep freeze.
Wednesday 14th February 2018 - Gas prices gathered yesterday, driven up on the back of a sharply colder weather forecast for major European capitals that would see the mercury plunge upwards of 5 degrees below normal for the time of year. This morning the system is long, weather forecasts are touch warmer and wind power output is high, as a result the spot and front end of the curves are down while longer dated contracts are more or less unchanged.
Thursday 15th February 2018 - Gas prices were slightly softer yesterday, on the back of a long system and a sell-off in spot prices. This morning, the system is long as demand drops faster than supplies into the UK and the weather warms up. Coal and oil hold on to and make further gains as stock markets continue to recover from the recent route. This morning's weather forecast runs have come in a touch warmer and the front month has sold off while the back end of the curve has found support.
Friday 16th February 2018 - Gas prices were distributed lower yesterday on mild forecast runs showing temperatures assembling closer to normals for this time of year in addition, coal traded down competing for space in the power sector. This morning, the system is long, albeit just barely, flows are mostly unchanged and demand is dropping on mild weather. However, the weather runs have gone from predicting a warm-up to above normal temperatures to predicting a drop to new lows in cold weather compared to the last few days. There is a great deal of disagreements in the forecasts and with the latest going cold, prices for gas have regained all of yesterday’s losses on the first trade. With this information, it is unlikely traders will go into the weekend holding short positions.
Monday 19th February 2018 - Gas prices assembled on Friday as traders covered short positions and took length into the weekend over concerns of a pronounced drop and prolonged period of below normal temperatures. This morning, the cold forecasts have been confirmed and the market is up over 2p/th on the spot and front month respectively. The cold weather is expected to hang around into March thus far with no return to normal forecasted during the 15-day period, leaving the market concerned this could be a repeat of the record cold snap of 2013.
Tuesday 20th February 2018 - Gas prices jumped to new highs in the spot market yesterday as the market braces for a drop into below normal temperatures later this week. Confirmation of colder than normal temperatures for the next couple weeks pushed prices up across the curve with the front month rising the most while longer dates contracts followed in sympathy. This morning, the system is quite long as demand remains high from storage operators to inject ahead of the cold snap, prices are also higher but the increases are a bit more modest when compared to the moves on Monday.
Wednesday 21st February 2018 - Gas prices continued to fall yesterday, pushed higher on forecasts and short covering as weather forecasts suggest colder temperatures for a longer period. Gains were made in the UK gas market as the cold weather is set to engulf Europe. This morning, the system is long as the NBP continues to price at a premium to the continental markets encouraging shippers to send gas to the UK. Forecasts are broadly unchanged, coal is down slightly as is oil; expectations are for a build in US stocks tomorrow. The primary drive for the markets will be weather and the stability of flows, so far today very little has changed.
Thursday 22nd February 2018 - Gas prices were increased for another day in the spot during Wednesday's session in both the UK and on the continent, by contrast curve prices were mostly flat with a few minor losses on some of the longer dated contracts. This morning, the market has had a bit of a reversal, clawing back some of yesterday's late afternoon sell-off. Gas price continue to pick up in the spot market with gains on the curve more limited in early trading action.
Friday 23rd February 2018 - Gas prices were dealt higher in the spot and on the front month yesterday as the market continues to brace for the cold weather and snow that is expected next week. Support for the market also came from a rally in coal prices which have moved up with the cooler temperatures while gains in oil from a surprise draw in US stockpiles lent sentimental support. This morning, the market continues to move higher in the front with march trading up a penny and a half in early action The forecasts are mostly unchanged from yesterday with cold temperatures and reasonable solar and wind production give the low temperatures. National grid data is unavailable this morning so we do not know if the system is long or short.
Monday 26th February 2018 - Gas prices hit new highs on Friday as the markets shook, trade action was aggressive and in large volume, Day-Ahead prices climbed in advance of the worst of the cold snap with prices in the UK climbing more than 15p/th intra-day before settling over 11p/th higher. This morning, the system is long despite declining flows through the interconnector, the oversupply comes from a step-up in off shore production, flows across the BBL and draws in medium range stocks. The weather forecasts are showing a sharp increase in temperatures for Europe over the next week.
Tuesday 27th February 2018 - Gas prices took a bit of a beating yesterday selling down over 6p/th on the Day-Ahead while on the continent prices were down around 1.5€, coal was sold down aggressively along with gas on the back of a confirmation of a return milder weather next week. This morning, the system is short as demand reaches its forecast peak during the cold snap, spot prices are up and the curve is moving in modest sympathy. Traders continue to watch the forecasts closely for a return to below normal temperatures which has been suggested by some meteorologists at the end of the 15-day outlook.
Wednesday 28th February 2018 - Gas prices recovered yesterday in the spot markets with a bit of vengeance, making gains of 12€ and 23p/th respectively. The move was driven by weather and a tight supply demand balance despite falling prices for both coal and oil. This morning, the system is a touch long, which on the face of it would seem pretty neutral.
Market Comments March
Thursday 1st March 2018 - National Grid have issued a system deficit warning for today as there isn’t enough gas coming into the system to meet demand. Over the course of the day they will be using numerous strategies to combat the shortfall. This has resulted in high prices for today and tomorrow. Whilst this is pretty dramatic in the short-term, pricing for the rest of the curve is only slightly up reflecting the view that once the cold weather disappears all is well with the world.
Friday 2nd March 2018 - UK gas market was one for the record books yesterday, what began with a deficit warning by the National Grid ended with Within-Day gas trading at its highest level in 20 years clearing £3.50 while system balancing prices were almost £5. Temperatures have begun to warm slightly and demand is already receding, falling 26mcm from yesterday, the system is a mere 2mcm short and stocks in the UK remain half full which should help provide stability to prices at more reasonable levels. Gas prices are trading down this morning as the forecasted warm-up is confirmed into the weekend.
Monday 5th March 2018 - Gas prices gathered into the weekend as traders covered positions again in case of any bullish weather surprises or infrastructure outages over the weekend. Only spot prices came in lower but that was to be expected as temperatures had already begun to warm up. This morning, the system is 45mcm long as demand drops sharply, flows remain robust and a few LNG cargos are set to come to the UK, to replenish the decimated LNG storages.
Tuesday 6th March 2018 - Gas prices continued to fall yesterday from highs on Monday as temperatures continued to regulate as the Siberian cold recedes. Prices on the gas curves were unchanged after the day's trading ended. A reversal late in the session of both coal and oil kept gas from sliding into lower day on day. This morning, the system is again long despite a drop in flows across the interconnector and a reduction in wind power which should create a pick-up in spot demand for gas fired power. Curve prices are dealing slightly lower as warmer forecasts have been confirmed and spot prices continue to drift slightly lower.
Wednesday 7th March 2018 - Gas prices united yesterday as traders look past the 10-day forecasted warm-up to concerns that the back end of March could be colder than normal. Low temperatures coupled with low volumes in storage have pushed risk premium back into the market, add to that the news that Russia is ditching its supply deal with Ukraine and that is a powerful cocktail for the bulls. This morning, the system is long temperatures are set to warm, the back end of the forecasts look like they may be a touch below normal, coal is down and the API is reporting a large build in US crude stocks. All of this in the market is off slightly but the list of this to worry about and the volatility of the past couple weeks gives pause to big risk takers.
Thursday 8th March 2018 - Gas prices continued to sell down in the UK as temperatures warm up and demand wanes. On the curve prices held as traders remain fearful there could be another cold snap at the end of March. This morning, the system is long and forecasts are mostly unchanged. The market is up with coal and hedging interest for the summer and next winter amongst the already mentioned supply concerns.
Friday 9th March 2018 - Gas prices rallied yesterday as traders and regular buyers ran to cover short positions and build length prior to the weekend. Weather forecasts and meteorologists are warning of a cool down at the end of next week and there is a possibility of another blast of arctic cold, however the likelihood remains difficult to measure. The gas market retains only very limited flexibility in dealing with another prolonged bout of cold temperatures. This morning, the system is balanced, coal and oil are unchanged but the European gas and power markets continue to rally.
Monday 12th March 2018 - Gas prices continued to improve into the weekend as the certainty over the coming cold snap improved and gains were also made in oil and coal. This morning, the system is long a measly 5 mcm and the forecasted cool down has been confirmed in the market. The limited flexibility left in the system has meant that price remains one of the only drivers to increase supplies or slow demand. Additional supplies from LNG are too slow to come to Europe. Low storage stocks will mean flows will come only at high prices during the period of below normal temperatures.
Tuesday 13th March 2018 - Gas prices rocketed right at the start of trading yesterday marking a strong start to the week. The gains were not driven by unevenness of shortness in the system, but by hedging and speculative buying ahead of the cold snap that will take place this coming weekend and early next week. Gas prices traded higher while major rivals, coal and oil were dealt lower opening more competition between coal and gas for use in power generation. This morning, prices are up slightly as forecasts are mostly unchanged, a warm-up is evident in the forecasts, if correct the duration will be shorter than the previous blast of arctic air.
Wednesday 14th March 2018 - Gas prices fell yesterday, on the back of system length and weather forecasts showing a warm-up after the 5-day period. Today the system is again long, reductions in Norwegian production have been restored and weather forecasts have been revised warmer in the back-end of the outlook. In addition, to a retracement in gas prices, power prices are down across Europe and the UK falling on the moderating temperatures increasing wind output and a drop in coal prices in early trade action. Despite the return to normal temperatures, traders will continue to watch the weather closely until winter is over on account of very low flexibility.
Thursday 15th March 2018 - Gas prices fell yesterday as market bears regained some control from the bulls after forecasts showed this weekend's winter wonderland would be followed by a return to more normal conditions. Spot and front month were most effected by the changes in forecasts falling in the UK 7p and 3p respectively. Forecasts are unchanged from yesterday; coal and power are trading slightly lower which will put some pressure on gas.
Friday 16th March 2018 - Gas prices rallied yesterday, driven by the spot as traders picked up a bit more gas ahead of the cold snap to hit over the weekend. This morning, the market is up as traders bid up spot prices ahead of the weekend. the latest forecasts look a little cooler ate the end of the forward 15-day period, oil and coal prices are mostly unchanged while power prices across Europe and the UK are up, mostly from the front and the spot. The cold weather is expected to be coupled with good renewables generation which may take some of the sting out of the increased demand.
Monday 19th March 2018 - Gas prices repeated on Friday, despite the cold weather as the market appeared to have added a bit too much risk premium to the coming temperature event. This morning, the system has opened almost 40cm long as the fear of not having enough gas has turned into the reality of having a surplus on the coldest day of the forecast. Contracts are trading around flat to the close this morning, with only the Day-Ahead contract trading down in early action.
Tuesday 20th March 2018 - Gas markets were rather unclear for most of the day yesterday. The system was severely long on the coldest day, but signs of a new round of cold air in the beginning of April sent contradicting signals to the market. Today the possibility of another round of cold air over Europe in the beginning of April has increased, driving up the front of the gas this morning. We face the fact, that storage levels are at historical lows for this time of year, and the last thing the market needs is a cold April. That could have a severe impact on April deliveries.
Wednesday 21st March 2018 - Colder weather and a flow in both coal, oil and carbon was the ingredients in the cocktail that sent gas up yesterday. Most visible is the rebound in coal, that ended up almost 2.5 $/ton for the front cal contract. This has to be seen, though, in light of the slide coal has had since the end of Jan, where it is still down 12.5 $/ton. This morning, we spread the gains on further support from the weather and on oil staying at the level it closed at yesterday. Coal is down though, so the upside to the curve should be limited.
Thursday 22nd March 2018 - Prices for gas made a modest rebound yesterday in the forward market while the spot was dealt lower on a well supplied system. This morning, the system is again long with no imports from the continent across the interconnector as temperatures approach normal after a little cold snap. Although storages continue to be low as we move out of winter, some relief is on the horizon for the UK with 4 LNG cargos expected before the end of the month which should bolster stocks and improve flexibility.
Friday 23rd March 2018 - Yesterdays gas prices came off following a drop in prices for other energy commodities like oil and coal. This morning, the system is long, the interconnector is not needed for imports to the UK and weather forecasts are coming in slightly warmer than the previous run. The gas markets are trading a little lower in early action, coal contracts are dealing for lower prices while the power markets and carbon are already down from the open.
Monday 26th March 2018 - Gas prices came under pressure on Friday from moderating temperature forecasts and a softening demand outlook. Coal prices were also bearish on Friday, adding to sentiment on gas while carbon and oil prices moved higher. This morning, the system is long almost 20mcm, Norwegian outages have been resolved boosting exports and forecasts have been confirmed milder than those from last week. Prices continue to be under pressure in early trade action as the bears retain their dominance as winter may finally be drawing to a close.
Tuesday 27th March 2018 - Gas prices dropped in the UK and on the continent yesterday as weakness took hold of the broader energy complex, in addition to gas and power, coal and oil also traded lower with the exception to the bearish mood being carbon credits. This morning, the system is balanced and weather forecasts look to be a bit warmer putting a bit of downward pressure on prices in early trading.
Wednesday 28th March 2018 - Yesterday’s gas prices gathered with weather forecasts for the UK predicted to be a bit colder. With already very low stock levels across the UK, any shifts towards colder weather have caused fits of buying and short covering. This morning, prices are dealing slightly lower after retracing part of yesterday's aggressive price moves.
Thursday 29th March 2018 - Gas prices were softer at the close of business yesterday after making gains throughout most of the session. This morning, the system is stable, UK forecasts are a touch cooler while temperatures for the continent are mostly unchanged from the previous outlook. The gas market awaits news from the Dutch government about the production cap for Groningen and is trading up slightly with the power markets, coal and carbon. Most players should be well protected going into the Easter long weekend, so volumes will likely be thin on the day save for some volatility around the production cap announcement.
Market Comments April
Tuesday 3rd April 2018 - Markets were closed on Monday for the Easter holiday in the UK with only marginal OTC (over the counter/bilateral trade available on the continent). Some price moves were still evident with oil trading down almost $2 on a continued rout in global stock markets. This morning, the market has shifted to 'summer' delivery with April, Q2-18 and Sum-18 contracts expiring and going into delivery. The system is balanced with a sharp drop in supplies as the interconnector has gone to zero with no flows from Belgium to the UK. Coal, carbon, power and oil are all trading lower this morning and gas is following suite, forecasts have come in warmer than Thursday.
Wednesday 4th April 2018 - The system opened balanced, but forecast are being adjusted after a cooler snap due and therefore the bulls are back buying the spot and front end curve. Additionally the European energy complex is supported by coal, power and carbon however Brent crude is broad unchanged.
Thursday 5th April 2018 - Markets were mostly unaffected by close of business yesterday, softer prices for coal and oil were offset by concerns over slightly cooler forecasts. For the first time in many months the bi-directional interconnector has flipped to exports from the UK to Belgium, a sure sign that spring is upon us. This morning, the system is modestly short, however, prices are slightly down from the spot out to the back-end of the curve, on a revised temperature forecast coupled with softer power, coal and carbon prices. Markets remain a bit sluggish as a risk-off approach from the broader equities markets seems to be influencing the commodities markets.
Friday 6th April 2018 - Gas prices dropped slightly in the UK spot market yesterday on the back of weather forecasts which have been revised warmer, the softness spilled over into May-18 contract sending it lower. By contrast, gains in coal and oil provided support the winter and subsequent seasonal and calendar contracts. This morning, demand is off substantially, outpacing the fall in supply which has left the system long by 7mcm despite exports to the continent. Weather forecasts have been revised even warmer again today which is pressuring spot prices, a strong pick-up in LNG deliveries over the next week should also weigh on prices.
Monday 9th April 2018 - Gas prices were dealt a little lower on Friday, driven down from weakness at the front of the curve while longer dated contracts like the Win-18 and Calendar contracts were supported by coal, power and carbon with only oil providing bearish sentiment. This morning, the system is short 15mcm as Norwegian flows have been diverted from the UK towards the continent. Weather forecasts have been confirmed warmer than they were expected to be on Friday. Prices are a touch softer in early trade action for the front month and Q3, while spot prices are expected to find some support.
Tuesday 10th April 2018 - Gas prices rallied yesterday, on the back of a short system which pushed the spot price up 1.5p/th in the UK and almost a euro on the continent, a rerouting of gas from the UK to the continent caused the shortfall that persisted throughout the day and was exacerbated by an unplanned field outage. Curve prices were dragged up with the spot and by $1.50 plus moves in oil and coal which were driven in part by a cyclone in Australia and by US Tariffs/Sanctions against Russia which hit metals producers, particularly aluminium, driving up prices for commodities. This morning, the dust has yet to settle, the system is long and flows from Norway and Russia have stabilized, however coal, oil and carbon are up so gas is trading modestly higher in early action.
Wednesday 11th April 2018 - A wave of Norwegian outages, planned and unplanned, coupled with rising prices for coal, oil, power and carbon boosted prices for gas and power across the UK and Europe yesterday. The relative tightness continues this morning with the UK system falling 5mcm short despite a modest up-tick in flows from Norway, exports to the continent and a minor increase in demand have pushed the deficit. Prices are mostly unchanged this morning in early trade action, weekly oil numbers are expected to show builds in crude stocks which might take some strength from the commodities rally.
Thursday 12th April 2018 - This morning, the system is slightly short again, as supplies drop slightly faster than demand as temperatures are set to warm up over the weekend for the UK. Prices are lively around the previous close in early trade action this morning, coal is off slightly and oil is mostly flat. Some relief from the upswing may come next week as temperatures in the UK rise, however low stock levels will keep markets supported for the near term.
Friday 13th April 2018 - Gas markets took a break from the bull run yesterday to hold fast, only spot prices increased which came as the result of a short system. Prices in the UK were down more than on the continent where they ended the day mostly flat, this was the result of a strong performance by the pound which appears to be breaking out from its sideways trend on the possibility of positive inflation numbers and the possibility the BOE will increase rates this year. This morning, the system has moved into markedly short territory because falling flows to the UK from the continent and a drop in LNG send out. prices have ticked up in response to the short system and a minor gain in coal prices in early trade action.
Monday 16th April 2018 - Gas prices rallied on Friday, making almost unchanging gains from May to the Winter-18 contract on the NBP, much the same was experienced on the continent. Gains came from a short system coupled with increased prices for competing feedstocks and inputs like coal, oil and carbon. This morning, the system is again short on the back of a halt in gas flows from UK offshore production, this may dissipate as the wind is expected to pick-up throughout the day which should ease gas demand from power generation. The pound is stronger again today while oil and carbon are weaker, temperatures are expected to return to normal by the end of the 15-day period. Gas is currently trading around the close from Friday.
Tuesday 17th April 2018 - UK Gas prices dropped yesterday driven by a slide in spot prices near the end of a trading session which saw gains for most of the day. The sell-off withdraws some gains made on Friday which have kept prices mostly sideways over the past few sessions. Weakness in gas was also driven by a turn in oil, despite the gains in coal which is a competing fuel to gas for power generation, carbon was basically flat. This morning, the system is finally balanced with a few mcm to spare as a strong pick-up in wind power output has pushed several gas-fired power plants out of the money to generate on the day. Weather forecasts continue to show a return to normal conditions at the end of the 15-day period with some change for below normal temperatures.
Wednesday 18th April 2018 - Gas prices repeated yesterday, driven down on the spot by a pick-up in wind and above normal temperatures. This morning, the system is slightly long on a minor up-tick in flows from Norway, renewables generation is picking up with good wind and solar in the UK today. Currently, the market is trading mostly flat to the close with the exception of the spot which is down in early trade action, both oil and coal are up slightly.
Thursday 19th April 2018 - Gas markets recovered yesterday following on the moves from coal and oil which were both up almost $2 each. This morning the system is slightly long as demand continues to wane on warm weather, an expected dip in wind output over the coming days will support spot prices, however high winds are expected to return by the weekend. Prices are up in early trading.
Friday 20th April 2018 - Increases in oil, coal and a Norwegian outage improved prices from the prompt to the end of the curve for both the NBP and continental markets. Despite the mild conditions, gas prices rose throughout the day, wind production has been very low but is expected to pick-up into the weekend which should ease some tightness in the market. This morning the system is very short, 20mcm, on a drop in flows coupled with an increase in exports to the continent, the latter will likely need to be reduced to balance the system. Coal and oil are trading flat in early trade action.
Monday 23rd April 2018 - Gas prices closed slightly lower on the spot Friday, but made modest gains across the NBP curve driven by a fall in the value of the pound against the euro, on the continent a weaker spot was met with a curve that was mostly unchanged day-on-day. This morning, the weather forecasts confirm a return to more seasonal temperatures from the much above normal weather from last week, wind production is expected to be strong today and for the next couple days while solar with extended cloud cover, spot gas prices are down while the curve is mostly unchanged in early trade action. Oil and coal prices are in a bit of a holding pattern this morning, US rig counts rose week-on-week while investor interest in the oil markets is growing on expectations of further gains in price.
Tuesday 24th April 2018 - Gas prices continued to tick higher yesterday driven by an expected drop in temperatures back to normal coupled with gains in coal and oil. This morning, the system is balanced but only just and this has pushed spot prices up, the curve is strong as well as making gains of half a penny on the front season. Continental markets are also in positive territory with minor gains from yesterday’s close. Two LNG cargos are expected to the UK before the end of the month to aid in the rebuilding of stocks, up to five will dock in France, Europe will need robust LNG deliveries coupled with already strong flows from Norway and Russia to rebuild its storages.
Wednesday 25th April 2018 - Gas prices fell yesterday with coal and oil, weakness that came from a continuation in some Libyan production, bearish stock numbers from the weekly API survey and calls from the French president to renegotiate the Iran nuclear deal to keep the US on side and to stave-off sanctions. This morning the system is short on the back of a minor up-tick in demand coupled by a drop in flows from a series of Norwegian and UK offshore production outages. The market is trading close to yesterday's close, oil is down slightly, coal has yet to trade and continental power and carbon are both dealing slightly lower.
Thursday 26th April 2018 - Gas prices had a modest reflection on Wednesday after falling on Tuesday, increases were helped by a $1 increase in coal, while oil was mostly sideways. This morning, the system is long almost 20cm on increased supplies to the UK, coupled with more wind power production which has reduced gas demand from power generation despite the cool down. Gas prices are trading close to the close from yesterday as traders look to the broader energy and equities markets for direction, coal and oil are up slightly in early trade action.
Friday 27th April 2018 - Gas prices assembled yesterday, following a bullish energy complex which saw also gains in oil, coal carbon and power. This morning, the system is again long, despite the increase in demand, due to an up-tick in supplies from Norway and from off-shore UK production. UK and continental gas are trading very close to the previous session's close, oil is down slightly while coal is up a touch. Power markets are soft for the weekend on the continent where temperatures will climb above normal while in the UK prices are mostly flat on below normal weather.
Monday 30th April 2018 - While continental gas contracts closed flat or slightly up to Thursdays close, all NBP contracts closed at a significant premium. A 1 %-point drop in the pound had a significant effect on pound denominated contracts. Apart from the currency move, coal and carbon continued to strengthen, giving some support to the gas, while oil resisted more Iranian related tensions and closed flat. Temperatures have dropped during the weekend and the system is slightly short this morning despite rising Norwegian flows. On top of the current outages in Norway, more fields and export terminals will be taken out for maintenance from tomorrow and onwards. Yearly maintenance on Norwegian infrastructure is expected to be significant until the end of June which is expected to support prices for the time being. Like on Friday, coal and carbon is up, while oil have just dropped a touch. Gas opens up in the front.
Market Comments May
Tuesday 1st May 2018 - Colder weather in the UK and demand has risen to levels significantly above seasonal average. Instead of injection into storage gas is now being withdrawn and with the current very low storage levels this is something that supports prices. It also means that import to the Continent from the UK is at a low and weather in the UK therefore also supports prices on the Continent. There have been healthy LNG deliveries the last couple of days but it’s still not enough to make the market players relax. Generally, we are going towards a period with lower demand and storage levels are picking up but the general mood is still quite bullish and prices stay strong.
Wednesday 2nd May 2018 - Gas prices improved slightly yesterday. The weather forecasts have turned warmer and within the next few days temperatures are expected to reach levels above seasonal average. This reduces demand and restores the high injection levels needed to fill the storages before the start of next winter. Despite slightly lower prices yesterday, gas prices should be expected to stay supported during the next month.
Thursday 3rd May 2018 - There was somewhat of a sell off for gas prices in Europe yesterday. It was partly driven by a balanced system despite the beginning of maintenance in Norway, and by falling coal and carbon prices. Weather is looking mild for the coming period across all of Europe. This will give storage holders an opportunity to inject at a higher level. We need the storage situation to improve to take some risk off the market. Today, gas markets have opened slightly down again as the mild weather is confirmed, and as coal is coming further off.
Friday 4th May 2018 - Gas markets recovered during the day yesterday as oil and coal rallied in the afternoon. Gas opened slightly down yesterday as the warmer weather was confirmed and as coal opened the day further down. But in the afternoon coal turned around, driven by a bullish oil. The tension in the oil market is rising as we approach the May 12th deadline for a US revision of the lifting of sanctions against Iran. Trump has expressed his unhappiness with the agreement his predecessor made with Iran, effectively lifting sanctions on the country. If US withdraws from the agreement, new sanctions against Iran is likely, and this is likely to hit the country’s oil production. It’s a wait and see game in the oil market right now, and this also seems to be the case for gas, that will take direction from the oil market. Gas markets are flat to yesterdays close this morning.
Tuesday 8th May 2018 - Gas markets were closed yesterday in the UK for a bank holiday, a little trading was done on the continent in the OTC markets with all connections closed. This morning, the system is modestly short on an increase in demand relative to a tepid response in supplies. The US president has stated he will make a decision on the Iran nuclear deal today, at 8pm CET / 7pm GMT so markets will be closed in Europe. Short covering is expected throughout the day ahead of the announcement, gas is up slightly in early trading while coal is flat and oil is slightly down.
Wednesday 9th May 2018 - Gas prices in the UK traded to new highs before being sold down near the end of the session on a drop in the prices for both oil and coal. Late last night, President Trump announced he would not renew the sanctions waiver for Iran, thus essentially removing the US from the 6-nation nuclear deal with Iran. Oil markets rallied in the US and have held gains into this morning's European trading session. Gas, coal, power and carbon are all in confident territory at the open, the system is slightly long with healthy exports to the continental storages so spot price movements should be the least affected.
Thursday 10th May 2018 - Gas prices continued their climb yesterday, pushed higher by a rally of over $2 in oil prices which came from news that the weekly US oil data showed a 10-million-barrel draw in crude and oil products. Coupled with the US exit from the Iranian nuclear deal oil has gained more than $4 over the past 4 days. This morning, the system is short despite increasing flows to Europe from both Russia and Norway, the UK has seen an increase in weather related demand, lower wind and cooler temperatures, coupled with a drop in supplies from Norway. Markets are open in the UK, however, much of Germany and the Nordic countries have bank holidays today so trade action is limited.
Friday 11th May 2018 - Another day another increase in gas prices, the drivers remain the same, support from storage operators and a tight system from the fundamentals, while gains in the energy complex bolstered bullish sentiment. This morning, the system is almost 20mcm long which will require a step up in exports or storage injections to balance the UK. Spot prices are dealing down 1.5p/th while the curve is trading slightly down in sympathy as traders are keeping a close eye on oil and coal prices, with the former down a mere 10 cents and the latter up half a dollar. All markets are open today after yesterday's continental holiday, however, expect volumes to be lower.
Monday 14th May 2018 - Gas prices assembled on Friday, marking a new high-water mark for prices this summer. The rise in gas prices was driven by strength in the coal market and by fundamental strength in the spot market, the latter a result of another unplanned outage in Norway. This morning, the system is balanced, despite the drop in supplies increased demand and steady exports to the continent. The storage situation continues to improve, with stock levels now only 3% below levels from a year ago and very close to the bottom end of the 5-year range. Today, both oil and coal are down slightly in early trading and gas prices are offered down from the open but have yet to trade.
Tuesday 15th May 2018 - Oil and coal moved up yesterday by $1 and $2 respectively, dragging gas up with them despite starting the session down. Gas and power in Europe are price takers and be it due to oil indexation of pipeline gas or LNG or competition in the power sector the broader energy complex is driving Europe now. This morning, the system is long, demand is down and supplies from Norway are up. Stock levels continue to improve and at this pace will be higher year on year if this injection level is sustained. a retracement in gas will come from a pull back in global commodities and a return to healthy stock levels, both of which are likely to take more time.
Wednesday 16th May 2018 - Yesterday’s gas prices took a pause, ending the session unchanged for the most part on the curve and down in the spot market. This morning, the system is balanced on lower exports to the continent and an increase in supplies to the UK from both UK and Norwegian sources. Flows have been quite consistent over the past couple of days so price action will dependent on the broader energy markets, coal is up about 20 cents and oil is down much the same and carbon is flat. Gas prices are up slightly from the close in early trading action.
Thursday 17th May 2018 - Gas markets in Europe and the UK dealt lower for most of the session yesterday, save for the spot market which rallied on another unplanned outage in Norway, which pushed prices above the average price for the previous winter. This morning, oil, coal and gas are all up, oil is up on rumblings over the planned meeting with North Korea and fall out from declining stocks, gas is up on another outage for 5 days from Norway and a short-term increase in demand from a drop in temperatures while coal power and carbon are spiralling upward with the bullishness of the broader energy markets.
Friday 18th May 2018 – Bullish oil, coal and EUA’s supported gas market yesterday, and prices increased across the board. Oil surged even further yesterday, and traded as high as 80.50 $/bbl for Brent. It did drop a bit during the night on what looks like profit taking, trading around 79,50 $/bbl this morning. This morning we open slightly down, on a little drop in oil during the night.
Monday 21st May 2018 - A drop in oil and coal set the stage for a correction down in gas prices on Friday. Both coal and oil have flirted with so called ‘big figure’ levels, and have so far had difficulties in establishing above. Today most of Europe is closed due to Whit Monday so we expect low liquidity, but UK gas is coming off from the beginning of this week as the system is slightly long.
Tuesday 22nd May 2018 - Gas prices shadowed oil and coal to the upside on Monday, trading in thin volume over a continental holiday. This morning, coal and oil are up and, as a result, so is gas, driven by the curve rather than the spot which has moved up to follow, despite the UK system being in a situation of oversupply. Some of the demand should be credited to the coming Kollsnes gas processing plant which is planned to be out for one day, May 24th, cutting Norwegian processing by almost half, 145mcm/d. The bull run continues until all the real buyers, storage and industrials, are gone and the speculators cash out on their positions.
Wednesday 23rd May 2018 - Gas prices took off yesterday, out pacing the moves in oil and coal, as the European energy complex moved higher. This morning, the system has gone very long, 35mcm, despite the start of Norwegian maintenance which has dropped by almost 30mcm, rerouting volumes to the UK from the continent for pipeline works. Temperatures are expected to remain well above normal for the time of year for the rest of the 15-day outlook, while some forecasters are calling for cool temperatures at the peak of the summer in July and August. Prices are down slightly in early trading from the spot and down the curve.
Thursday 24th May 2018 - Gas prices took a break yesterday after climbing higher the day before, coal joined gas in the down turn as did oil, for most of the day before returning to positive territory near the close. This morning, the system is a mere 3mcm short as both demand and supply in the UK drop sharply. The outage in the UK's largest supplier is only planned to last for a day before it ramps back up. Prices are up this morning of the drop in supplies and a small bounce in coal and gains in carbon, oil is down.
Friday 25th May 2018 - Gas prices improved yesterday following a fall in oil and a balanced supply/demand picture in the UK and Europe despite a large drop in flows from Norway on the back of some short-term maintenance. Prices dropped across the curve from the spot to the longer dated contracts in both the UK and on the continent while the broader European energy complex sank except for carbon that apparently didn’t get an invite to the big bear jamboree. This morning, the system is slightly short on a drop-in supplies from a pick-up in exports.
Tuesday 29th May 2018 - Markets were closed yesterday in the UK and the US for the Spring bank holiday and Memorial Day respectively. This morning, the system is stable UK and Norwegian maintenances are ending and flows are ramping back up, temperatures are above normal for the balance of the 15-day outlook while wind output remains low while solar continues to pick-up. Coal, power and carbon are quite strong in early trade action while oil is only modestly positive, gas is following the European complex and is being dragged up by power.
Wednesday 30th May 2018 - Gas prices were shaken higher yesterday, driven by low output from renewable generation that forced the consumption of natural gas to fill in the shortfall. This morning, the system is modestly short in the UK on a dip in UK production coupled with a minor increase in demand, flows from both Norway and Russia have stepped up from maintenance, while coal, oil and carbon are all trading slightly down in early action.
Thursday 31st May 2018 - Gas prices assembled yesterday, driven by tension at the front of the curve, spot market, which has been the result of below normal wind power production and maintenance which has come up against steady demand for refilling storages ahead of the coming winter. This morning, the system remains short, modestly, with no wind in the forecast and low hydro reserves in NW Europe prices are up again on the spot driving the curve a touch higher, oil is flat and coal is slightly up. US oil stock numbers are out today, no other news.
Market Comments June
Friday 1st June 2018 - Announced steel and aluminum tariffs by the US against the EU, Canada and Mexico sent ripples through the broader commodities complex, although Brent crude was only marginally down US WTI fell much harder. Demand is off more than supplies to the UK which has pushed the system slightly long, gas flows to the continent are also up. Spot prices are offered lower than the close while curve prices are a touch stronger in early trade action.
Monday 4th June 2018 - Prompt contracts saw a sharp drop on Friday, with the week-ahead contract falling 2.12p/th to 56.24p/th, despite the start of a series of planned North Sea outages. Prices were potentially readjusting after strong gains seen last week and as temperatures are forecast to remain above seasonal normal, keeping demand low. A heavy sell off was also seen in near term contracts, seemingly as the market became more at ease with European gas storage levels after heavy injections have improved stock levels. Premium still remains however, with the balance of summer contracts remaining above 55p/th and Winter-18 above 62p/th.
Tuesday 5th June 2018 - Gas prices shadowed the broader European energy complex to the upside yesterday, gaining value with coal, carbon and power which were all very strong. This morning, prices have moved up again in early trade action. The gains again come are fuelled by nervous power traders who are concerned over delays in nuclear restarts in France and fears of a repeat on the problems of the last two summers. Gas fundamentals are unchanged but buying has lifted prices with power and carbon, coal and oil are mostly flat.
Wednesday 6th June 2018 - Yesterday’s gas contracts closed down, after trading higher over the first half of the session. Late weakness in oil and then coal pulled gas and power down, and with them carbon, leading the whole European energy complex lower. This morning, the system is balanced flows are virtually unchanged, temperatures are expected to warm up into the 15-day outlook and renewables are forecast to improve modestly. Oil and coal are in positive territory after yesterday's sell-off bringing UK gas and power and continental gas up, while German and Nordic power are down.
Thursday 7th June 2018 - Yesterday’s gas markets opened up, but intra-day updates on weather forecasts pointed towards lower temperatures and more wind production over most of North-western Europe which sent markets down. Oil also traded down throughout the day, and late in the afternoon we got some bearish stats for the US oil storages. During night hours oil has corrected up again, and this morning we see a bounce in coal and EUA’s, driving the gas up this morning.
Friday 8th June 2018 - A flow in both coal and oil drove up European gas prices yesterday. On top of this, the pound weakened yesterday, adding to the bullishness on the NBP. The Dutch Economy minister said it should be possible to lower gas production from Groningen faster than previously expected. Today the market is slightly short, and we are up a bit in the prompt, while the curve seems to open unchanged as nether coal or oil is much changed since the close yesterday.
Monday 11th June 2018 - After a strong start to the day on Friday, the bears took over, and sent down gas on most contracts. The front was hit the hardest as the weather forecasts in general have turned towards more wind across Europe, and temperatures are also forecasted to drop back closer to seasonal averages by mid-month. This comes after a long period of warm weather and low wind. This morning the system is long, Norwegian flows looks good, oil is down a touch and gas contracts have also opened down.
Tuesday 12th June 2018 - Gas prices came off yesterday as all inputs were bearish from the start of the day. Oil and coal was down from the morning, and flows were solid. During the day, oil and coal traded up again, and gas also gained a bit towards the end of the day, without closing in positive territory. This morning oil is up. The system is only balanced despite strong Norwegian flows, and we see gas markets trading up from the start of the day.
Wednesday 13th June 2018 - Although the DA was weak in the UK due to the beginning of maintenance on the Interconnector, the rest of the curve was bullish yesterday. Sturdy coal was the main reason gas was lifted yesterday, but the weather also turned a bit more bullish with less wind than the day before. Carbon and oil was weak yesterday, but this didn’t filter through to the gas market. Today not much is changed in the weather, but despite Interconnector maintenance, the system is short. This is lifting the DA, and the curve is also lifted.
Thursday 14th June 2018 - The leading driver in yesterday’s session was a short system. Despite the interconnector being out for maintenance stopping export to the continent injections into storage were sufficient to make the system short from the beginning. This morning the market is long but prices seem supported. Both coal and oil rose yesterday and added additional strength the gas curves. However, oil seems caught between 75 and 80 USD/ barrel and are expected to stay within that range until OPEC’s meeting June 22ng. This could prevent the gas market from setting new highs but the underlying complex seems strong.
Friday 15th June 2018 - Yesterday’s UK Gas contracts closed down, after trading higher until late afternoon. The Euro lost around 2% of its value against the dollar and the pound strengthened versus the Euro. The weak Euro development explains the price gains of continental gas, in contrast to the weaker UK prices. This morning, the system is 7 mcm long, the Interconnector will be offline for another 12 days, temperatures are expected to stay above normal until the last week in June and renewables generation in the UK are forecast to improve modestly compared to last week. Oil and continental gas are unchanged this morning; UK gas is up this morning and German power is trading higher than yesterday’s close due to a worsened wind forecast.
Monday 18th June 2018 - Gas prices were rising significantly last week during the first three trading days of the week. The gas market takes a lot of input from the oil market and falling oil prices were the main reason for gas correcting down the last days of last week. Rumours says that Saudi Arabia and Russia will mention increasing oil production with 750,000 barrels a day at the upcoming OPEC meeting. These assumptions have been powerful enough to make the oil prices come off and gas has followed. It’s important to bear in mind that gas storage levels are still low and we are in the middle of the maintenance period. This together with few LNG ships in the horizon is expected to keep the gas markets well supported.
Tuesday 19th June 2018 - Prices have generally come off the highs from late May but are still elevated. Shaving all the nervousness away it’s clear that the underlying sentiment in the fuel complex is strong. This combined with low storage levels and strong Asian demand for LNG creates well supported gas markets. It does seem a bit like several fuels are struggling to get higher but expecting markets to turn bearish now is difficult to believe in.
Wednesday 20th June 2018 - Gas prices came off yesterday. Dropping oil prices were the main driver behind the move down but prices were only neutralising the gains from two days ago. The market is still characterized by high volatility and prices being stuck in a broad but neutral range. We have previously mentioned that with gas storage levels being so low the power sectors demand for gas will be of particular importance this summer. With the latest statement of delayed upstart of several Belgian nuclear plants and weather prognosis expecting lower wind than normal the power sectors demand for gas is definitely expected to be on the high side.
Thursday 21st June 2018 - Gas prices withdrew yesterday afternoon, after a modest rally in the first half of the session. Weakness in coal, power and eventually oil signalled it was time for gas to follow the complex lower. This morning, the system is again modestly long, with temperatures to cool into the weekend before climbing back above normal into the coming week. All eyes are on OPEC for its meeting on the 22nd of June and any more statements that could outline the size of a possible supply increase.
Friday 22nd June 2018 - Prices for gas were down during the day yesterday following losses in both coal and oil, but staged a late session reflection in both the UK and on the continent on a bit of profit taking after the previous day’s decline. This morning, prices are up slightly with oil and coal as uncertainty remains over the OPEC meeting and any further supply increases. Wind is strong today but set to fade into the weekend, while temperatures are expected to increase over the weekend to well above normal again.
Monday 25th June 2018 - Gas prices crept up to the close of business on Friday, following on a two and a half dollar move in Brent crude as the market was a bit disanointed in the communique following the OPEC meeting. This morning, the system is stable, flows from Norway have come off slightly on an unplanned outage and the interconnector remains out until Wednesday. Gas prices are down in early trading as oil has reversed direction from Friday. Coal, carbon and power prices in Germany and the UK are also dealing lower which adds to the bearish tone for gas.
Tuesday 26th June 2018 - Prices for gas were mostly down yesterday, from the spot to the winter 2018 contract on the NBP while longer dated contracts made some minor gains. Oversupply joined with a return to more mild conditions pressured the front of the curve while a bump in coal supported the back-end. This morning, the system is long as demand falls faster than supplies can be re-routed, gas prices are down with coal and power while oil is up slightly from the close. A sharp drop in carbon this morning is making coal fired power cheaper which is weighing on the price of natural gas.
Wednesday 27th June 2018 - Gas prices dropped yesterday falling on an oversupplied spot market and a weak prompt while the back-end of the curve retained some support from coal and oil. This morning, the system is short on a dip in flows from Norway and some unplanned outages. Oil and coal have made minor increases this morning as well, pushing gas prices up further.
Thursday 28th June 2018 - Gas prices united yesterday, driven by yet further strength in coal and oil prices, the latter was pushed higher after stock numbers from the US showed a bigger draw than estimated. This morning, the system is long, oil and coal are offered lower than the previous close, albeit just slightly, and gas is offered at the closing price from yesterday. Continued above normal temperatures and robust solar power production are expected over the 15-day period, a forecast for stronger wind in the UK should help to ease gas demand into the weekend.
Friday 29th June 2018 - Gas prices were steady yesterday, with only a minor dip in the spot market, while longer dated contracts made some gains on the back of oil. This morning, the exports across the interconnector continue to ramp up but the system remains balanced in the UK spot prices have come off but the curve is essentially unchanged. The forecasts continue to show above normal temperatures out to the end of the 15-day period, low hydro stocks in the north of Europe, low wind and high solar.
Market Comments July
Monday 2nd July 2018 - Gas prices made increases on Friday as coal and oil rallied late in the session. The back end of the curve rallied, while the spot, front month and balance of summer came off slightly. This morning, the system is slightly long despite a ramp up in exports from the UK to the continent across the Interconnector. Coal prices are up this morning while oil is down slightly, in early trading, gas prices are mostly flat to the previous close.
Tuesday 3rd July 2018 - Gas prices assembled yesterday, making larger increases than most of the commodity complex. Coal and power were also up yesterday, with only Nordic power making bigger gains than gas. The UK market was particularly strong despite more modest movement on the continent. This morning, the oil and coal are up, power is mostly sideways and gas is bid on from the close of business yesterday. The system is slightly short as demand picks up slightly with a drop-off in wind power production.
Wednesday 4th July 2018 - Gas prices were varied in trade action yesterday, as rising coal and a short system provided lift to gas contracts whilst a dip in oil prices was viewed as bearish. This morning, the system is long over 10mcm, despite very strong exports to the continent across the interconnector and low power production from wind. Gas prices rise in early trading.
Thursday 5th July 2018 - Gas prices were mainly unchanged yesterday across Europe, as coal and oil made minor increases despite a long system and moderating forecasts. This morning, the system is 20mcm long even as exports from the UK remain elevated and wind power output collapses and is replaced with gas. Estimates are that US crude oil stocks fell for a 7th straight week last week by 4.5million barrels if so the market could continue to find some support. Gas prices are down slightly in early action with oil and coal.
Friday 6th July 2018 - Gas prices dropped yesterday morning at the start of the session, before ascending throughout the day to close in positive territory. Oil and coal also moved higher throughout the day before making a very late reversal after the oil numbers were released by the US Department of Energy showing a million-barrel build against forecasts of a 5-million-barrel draw. This morning, the system is 10mcm long, coal and oil are down slightly and gas is also down a touch in early action.
Monday 9th July 2018 - On Friday, the markets came off late in the session dipping a little in the UK following modest retracements in coal and oil. This morning, the system is balanced in the UK, the forecast remains stable for above normal temperatures and below normal wind production; exports to the continent are flat to last week at around 50mcm. Across the commodity complex today, oil and coal prices are up which are providing the lift this morning to both gas and power markets across Europe and the UK.
Tuesday 10th July 2018 - Gas prices improved yesterday driven to fresh highs on the back of an almost $2 per tonne move in the price of coal and a $1 move in the price of crude. This morning, the system is long and imports from Russia, via Ukraine have increased, the latter is likely due to a shift away from flows on Nordstream before maintenance. Coal and oil are up in early trade action, gas and power have followed, only the NBP spot is trading down.
Wednesday 11th July 2018 - Gas prices dropped at the end of yesterday’s session in the UK as weakening spot prices applied pressure to the front end of the curve while some minor strength in oil, coal and carbon helped to hold support on the longer dated seasonal products. This morning, markets are down in Asia and in commodities iron ore is leading the way down, the system is long, oil and coal are softer and gas and power are trading lower in early action.
Thursday 12th July 2018 - Gas prices were mixed yesterday, dropping early in the session on oil and gathering after a surprise draw in US stocks of 12 Million barrels was reported then plummeting into the close. This morning, the system is again long despite a minor dip in flows from Norway and increased exports to the continent. Coal and oil prices remain down further in early trade action and weather forecasts continue to show above normal temperature and solar and below normal wind and hydro production.
Friday 13th July 2018 - Losses were showing in the UK and on the continent and were given further downhill pressure from a substantial retracement in coal prices. This morning, a modest rebound in European energy prices is evident across all commodities save for coal and oil which are down modestly in early action. The system is balanced on a drop in supplies, strong exports and low wind power production.
Monday 16th July 2018 - Gas prices recovered into the weekend after traders took profit on short positions and oil rebounded to help give a lift. This morning, the system is long, weather forecasts remain above normal and renewables generation continues to struggle below normal for the time of year. In early trade action coal and oil are mostly flat to the previous close, power and carbon are up and gas is trading sideways in very thin capacity.
Tuesday 17th July 2018 - Gas prices slipped yesterday, despite resisting throughout most of the session. A massive drop in coal and oil prices of $2 and $3.50 respectively, was too much for the market to shrug off. This morning, the system is slightly long, flows from Russia are dropping as planned maintenance on Nordstream cuts supply to Europe. Coal and oil prices remain soft trading slightly down from yesterday’s close, gas prices are off slightly as well with only some power contracts making day on day increases.
Wednesday 18th July 2018 - Gas prices were only a little changed yesterday, despite softer coal prices, support to the market came from a minor up-tick in oil and a drop in flows from Russia's Nordstream maintenance. Prices have moved slightly with power because continued hot dry conditions and poor renewables generation.
Thursday 19th July 2018 - The gas market is boosted by further deterioration in the value of the pound against the euro, a massive jump in coal prices and a tighter supply picture with a drop in flows across the Nordstream Pipeline.
Friday 20th July 2018 - Gas prices made slight increases yesterday, despite a drop in both coal and oil. This morning, the system is long, exports are up and imports from Norway have also increased. Coal is down in early trading, while oil is up marginally, consequently gas prices are marginally higher on the curve while the spot is dealing slightly down day-on-day.
Monday 23rd July 2018 - Gas prices dropped on Friday into the close, following on the sell-off in coal which lost $2/tonne in value. This morning, the system is short, power prices are up while coal and oil are mostly sideways. Gas is trading a touch higher in early action. No changes in weather for the next 15-day forecast, temperatures will remain 3-5 degrees above normal, wind power production remains well below normal and conditions will continue to be dry.
Tuesday 24th July 2018 - Gas prices recovered yesterday lifted by a short system, increases in coal and the broader European power complex which saw carbon increase to new highs. This morning, the system is slightly short as flows from Norway dip and injections into storage increase. Coal is up, oil is down and gas is sideways in early trade action.
Wednesday 25th July 2018 - Gas prices moved up slightly yesterday, increasing support and momentum from rising prices in coal and oil, coupled with demand from the power sector which is relying more and more on gas. This morning, the system is balanced as demand for exports has dipped, the spot remains tight as upstream supplies have also fallen and UK supplies have dropped. Coal and oil are up again today on expectations of a 3-million-barrel draw in the weekly US stock numbers, released this afternoon.
Thursday 26th July 2018 - Today, the system is over 20mcm long owing to a pick-up in wind that is reducing the need for some gas fired power plants. Oil is up this morning on reports of a missile attack on a Saudi shipping lane by rebels in Yemen. Gas and power prices are down on the increase in wind and an expected dip in temperatures after the next two days.
Friday 27th July 2018 - Gas prices were distributed lower in both the UK and on the continent yesterday. Forecasts continue to show temperatures moderating slightly from well above normal to modestly above normal with increases in wind and precipitation, the result of which should be less demand for gas from the power sector. This morning, gas is offered on at the closing price, coal is slightly down as is oil, all of which are trading in thin volume, early in the session.
Monday 30th July 2018 - Gas prices were slightly lower on Friday in the UK while on the continent the result was more or less unaffected. This morning, the system is long on falling demand from slightly cooler temperatures and decent wind power output. Temperatures and wind are both forecast to fall during the week before another increase next week. Oil and coal are mostly unchanged from Friday, gas is down slightly and power is up in early trade action.
Tuesday 31st July 2018 - Gas prices in the UK edged up yesterday following a stronger spot, a minor increase in oil and a weakening of the pound against the euro. This morning, the system is almost 20mcm long, Russian flows continue to ramp back up and both coal and oil are dealing lower. Consequently, gas prices are also dealing down slightly in early trading, albeit in very thin volume.
Market Comments August
Wednesday 1st August 2018 - Gas prices relaxed yesterday in the UK, driven lower on the spot by a long system while the curve got hit by a drop in oil. Continental prices were also down, with the exception of the front end contracts which gathered supported from the spot market. This morning, the system is marginally long, Russian flows continue to ramp up and oil is down in early trading. Gas is trading slightly down with the spot leading the way, while coal, power and carbon are finding support.
Thursday 2nd August 2018 - Gas prices fell yesterday, following on an almost $2 drop in oil and a substantial drop in coal prices. This morning, coal prices continue to drop while oil and gas are up just a touch. The market is slightly tighter, owing to a drop in output from renewable power sources and a short term rise in temperatures prior to a return to more normal seasonal conditions.
Friday 3rd August 2018 - This morning, the system is very slightly undersupplied, oil and coal are a touch down while gas and power are up slightly in early action. Weather forecasts show a more distinct cooling development, with temperatures returning closer to normal by the middle of next week, this is coupled with increases in wind and precipitation which should be bearish for the spot markets as cooler temperatures and more renewables will take some of the stress off gas units in the power sector.
Monday 6th August 2018 - Gas prices united on Friday, following increases across the European energy complex from coal to power to carbon credits. This morning, the system is long, as demand for exports drops despite falling imports from both Norway and Russia. Gas prices are trading around last Friday's close in early trade action. A return to more normal temperatures for the time of year coupled with a bit more wind and lightly rain should help to cool over heated power plants and blunt the increased consumption.
Tuesday 7th August 2018 - Gas prices were up yesterday, driven by an almost $2 move in coal coupled with an increase in crude oil. This morning, the system is long and oil is in optimistic territory. Today and tomorrow mark the last of the extreme heat days in the forecast with temperatures returning close to normal across Europe, a pick-up in wind is also forecast, combined this should ease prices from a fall in demand.
Wednesday 8th August 2018 - Gas prices reached highs yesterday on the NBP front month trading. Increases in oil and coal continue to be highlighted as drivers for the move, this was coupled with strength in the spot as Europe and the UK grappled with one of the hottest days on record this summer. Dropping temperatures and the return today of flows from the UK offshore via Bacton SEAL will bring a bit more flexibility to the system. The system is marginally long this morning, coal and oil are trading flat to the close and power prices on the continent and in the Nordics are trading down, by contrast gas prices are up in early action.
Thursday 9th August 2018 - A striking reversal in energy prices came late yesterday after the US Department of Energy announced that crude and products stocks had a combined build after the market had expected a large draw of over 6 million barrels. This morning, the system is long, almost 20 mcm, coal and oil are mostly flat while power is trading sideways. Gas is trading down slightly in early action, helped by oversupply and improved wind power production.
Friday 10th August 2018 - Gas prices were rising yesterday, rebounding from the previous day’s sell-off. The market started down on the back of low oil and coal prices coupled with an oversupplied system. A turnaround in coal seemed to be enough for traders to buy the market back up, and for a positive close. This morning, the system is again long, flows have steadied from both Norway and Russia while cooler, windier has taken hold. The effect should be somewhat short lived as temperatures are forecasted to warm up again, albeit not to previous levels as temperatures are generally expected to moderate as we head into September. Coal, oil, and gas are all slightly down this morning, in early trade action.
Monday 13th August 2018 - Gas prices continued to rise on Friday, pushed up by strength in coal and oil in spite of fundamentals being unchanged. This morning, the system is balanced, flows have dipped from both Norway and Russia as has demand. Temperatures remain forecasted to be above normal for the 15-day outlook while wind production is a bit stronger vs. last week. Coal and oil prices are down slightly in early trading; however, power is up and gas remains bid from the close and looks set to make further gains based on spot price strength.
Tuesday 14th August 2018 - Gas and power prices united yesterday, hitting new highs, driven by increases in coal and a tight supply demand balance in the spot market. This morning, the system is long, oil and coal are up slightly and gas and power are making additional early gains. A slightly tighter supply balance can be seen with a drop in both Russian and Norwegian exports, by contrast demand is falling with increasing wind power production.
Wednesday 15th August 2018 - Gas prices moved up a little bit more yesterday, following the broader energy complex after moving up on their own the day before. Increases came in coal, oil and power, however after the session was over oil drifted into negative territory on expectations of stock builds of oil and products in the US week-on-week. This morning the system is balanced, demand is up slightly in the UK while supplies are modestly lower.
Thursday 16th August 2018 - Gas prices repeated yesterday, following a drop in both coal and oil prices and coupled with a weak global commodities complex. This morning, the system is long, oil prices are up and coal is down slightly. Gas prices have rebounded with oil which is up on hopes that a meeting between the US and China will reverse some of the tensions and tariffs over trade. UK exports to the continent improve as stocks continue to be rebuilt, stocks in the UK are in very good shape so excess supplies can be sent to France and Germany.
Friday 17th August 2018 - Gas prices continued to rise on Thursday increasing a little over a penny from the spot to the winter-18 contract, longer dated contracts also gained; although much less than near-term contracts. This morning, the system is very long despite high exports and a sharp drop in supplies. Prices in the gas market are up slightly, pulled up with coal and European power prices as well as an increase in carbon pricing, oil is trading flat to the close in early action.
Monday 20th August 2018 - Gas prices continued to rise into the weekend on Friday, as the European energy complex continued to lurch higher as increases in coal, oil and carbon contributed to bullish sentiment. This morning, the system is long, flows from both Norway and Russia are up as maintenance in the latter has ended increasing imports via Ukraine. Storage stocks have hit 96% in the UK which will leave more room to increase exports, stock on the continent are still lagging levels from last year by 2% but are expected to make up the deficit as they continue to inject into October, weather permitting. Gas prices are slightly softer in early morning trade.
Tuesday 21st August 2018 - Gas prices went on a rollercoaster ride yesterday first falling around a penny across the curve with spot prices crashing, only to be revived late in the session after the announcement of 2 unplanned outages brought the bulls back out to finish the session in the black. If prices could not fall in an oversupplied market, long system over the past couple weeks, then they certainly cannot fall today when the system has gone short on a drop in flows to the UK from British offshore production.
Wednesday 22nd August 2018 - Gas prices continued in positive territory at the close yesterday, getting support from oil and carbon, coupled with a short system that remained that way almost to the end of the session. The move in oil is being driven by a forecasted drop in US stocks of 5 million barrels, definitive government numbers will be released in the afternoon. Carbon is poised to trade 20 euros which will depress coal in favour of gas for power generation, providing support to gas prices.
Thursday 23rd August 2018 - Gas prices moved up yesterday, despite an oversupplied spot market. Increases were driven by the rally in oil which managed to close up over $2/barrel after US government data showed a drop in US stockpiles of over 5 million barrels week-on-week, a draw much larger than the market expected. This morning, the system is slightly short, demand has dropped in the UK as have supplies from Norway, exports remain strong as UK storages approach full capacity. Coal is slightly down this morning as is oil, gas prices are up modestly in early trading.
Friday 24th August 2018 - A massive move in Carbon yesterday was partly the reason behind a significant lift to all gas contracts. Carbon affects the gas prices through the likelihood of fuel switching. Coal also rose yesterday, just adding to the bullish sentiment in the European energy complex. System is slightly short this morning, but the market is likely to take direction from Carbon and the rest of the energy complex today.
Tuesday 28th August 2018 - A bank holiday in the UK yesterday meant UK markets were closed, and trading in continental gas was practically non-existent. But on Friday it was another day of bullishness in the European energy markets, and once again, Carbon seemed to be leading the way. Yesterday we got news of extended maintenance on 6 French nuclear reactors (6.8 GW) and with bullish coal and a Carbon market that broke above the 21 €/ton mark inputs to gas markets are bullish from the start of this week.
Wednesday 29th August 2018 - There was a bit of catching up to do for European gas markets yesterday as a bank holiday in the UK on Monday meant a closed gas market. As mentioned yesterday, coal, carbon and oil all traded up Monday, where 6 extensions of outages at French nuclear plants also hit the market. Therefore, there were lots of bullish inputs from the beginning of the week. So, despite lower oil and carbon yesterday, gas prices went up significantly. We are off to a slow start this morning, but the system is long despite the fact that we are in the middle of a large maintenance in Norway. Oil is marginally lower this morning, trading at 75.75 $/bbl, but any movements in carbon is likely to also affect the gas market today.
Thursday 30th August 2018 - This morning we see oil and coal up further, and gas prices are following. Oil traded up on bullish stats from US oil inventories. Coal went up on strong Asian coal markets. Carbon was down on the day, and looked like it could be in for a correction, but just turned around with the strong coal and oil to close the day up. A huge increase in the pound did little to limit the increases on the NBP.
Friday 31st August 2018 - Yesterday coal was trading 10-20 cents below previous highs, and after a few failed attempts to break through, coal simply collapsed, and closed the day 3 $/ton lower than day high. This pulled gas down and although closing prices doesn’t show this, the market closed the day in negative territory for most contracts. This morning coal and carbon have bounced a bit, and the market is up from last trades yesterday. Also, uncertainty of the return of Belgian nukes is supporting the markets this morning.
Market Comments September
Monday 3rd September 2018 - Weaker oil and a weak close for carbon was bearish, while a slight bounce in coal couldn’t counter this. There is several unplanned outages in the UK today, and the system is short by more than 30 mcm. Apart from that, oil is higher while carbon and coal is down. We have seen 5 restarts of Nukes in France over the weekend, and this has sent power contracts down in the front. While this should also be bearish gas, the market seems to have little focus on this as the gas outages gets more attention.
Tuesday 4th September 2018 - Gas prices united on Monday, driven higher by strength in the spot market as the system struggled to balance, causing withdrawals from storages. This morning, the system is again short and the market is gaining on this lack of supply, coil is strong, while oil is mostly sideways as the markets weigh record OPEC production against concerns over storms in the Gulf.
Wednesday 5th September 2018 - Gas prices increased on Tuesday, on the back of a short UK system. Gains in gas provided some upward lift to coal which in turn boosted power prices continuing the virtuous cycle throughout the day. This morning, gas prices are a touch softened as the market retraces a bit of yesterday’s increases on a balanced supply/demand picture in the UK even with a doubling of exports to the continent to the delight of eager storage operators. The broader energy markets, oil and coal are slightly down in early action.
Thursday 6th September 2018 - After a short-lived retracement early yesterday morning, gas prices reversed course and continued their climb, rising with coal and carbon despite a drop in oil and a balanced system. This morning, the system is a touch short, demand has picked up slightly while supplies have come off with delays in some North Sea maintenance. Fundamentals are not widely changed but prices have come into little resistance to the upside over the past month with little resistance expected until storages are full and the winter is well under way.
Friday 7th September 2018 - Gas price have formally decoupled from both coal and oil moving to new highs on their own while oil and coal declined in value. This morning, prices dipped on a balanced system but were quickly bought back up and are now at a premium to closing prices from yesterday. Coal, carbon and power are in positive territory keeping the sentiment in the European energy complex bullish.
Monday 10th September 2018 - Gas prices continued to rise on Friday, closing at fresh highs. The market was driven higher by moves in the European energy complex, specifically oil and carbon, increases in the latter make gas a more attractive fuel for power generation which help boost demand and price. This morning, carbon prices are up almost 9%, or 2 euros which has caused gas to reverse its early drop into negative territory with a rise back into the black. Weather remains neutral to slightly bearish, with temperatures broadly at or slightly above normal, wind and solar at or above normal and hydro production improving.
Tuesday 11th September 2018 - The UK has opened with good system supply this morning with the UK forecast below seasonal demand. Langeled flows remain low at but CCGT demand has dropped to 30mcm and the IUK exports have fallen to just 22mcm. Storage facilities are set to withdraw 8mcm of gas today helping to keep balanced. Prices ticked up upon opening but have since fallen sharply, with Winter 18 falling 2p/therm. The market traded at 81.10p/therm at 07:42 before ticking down to 79.10. Carbon prices have fallen from €25.17 to hold at €24.25 currently helping to pressure the far curve. The GBP has strengthened against most currencies on Monday and continued with its bullish momentum following comments from Michel Barnier that a Brexit negotiation with Europe could be agreed within 6-8 weeks
Wednesday 12th September 2018 - National Grid reduced the demand by 20mcm on Tuesday, due to an increase in wind generation. The CCGT demand reduced significantly with approximately 9GW of wind generation available on Tuesday. Norwegian outages have ended overnight and this has seen improved flows into the UK
Thursday 13th September 2018 - Gas took a sharp drop yesterday morning, however bounced back in the afternoon. Today the system is slightly undersupplied, carbon and coal are flat to slightly up while oil and gas are a touch softer. Temperatures have been forecasted warmer for next week with improved wind and solar output.
Friday 14th September 2018 - Carbon EUA’s have plummeted over recent sessions, trading at lows of €18.50 this morning dragging the back of the UK gas curve down with it. Reports on Thursday suggested that an injection of 100M allowances could be made if the market continued to kick up
Monday 17th September 2018 - Today the system is long, oil and carbon are flat, coal and power are up which are supporting gas to modest gains in early trade action. Volatility remains high with many contracts across the energy complex flipping between gains and losses. Norwegian flows are expected to pick up this week as some of the current maintenance comes to an end.
Tuesday 18th September 2018 - Another bullish open on the NPBP as a result of continued strength in coal and carbon. However Oil is the main headline after Trump imposes new tariffs on Chinese goods. Gas for demand power has also decreased with the increase in wind generation as storm Helene hits the UK today.
Wednesday 19th September 2018 - Gas prices retreated yesterday, falling with the broader European energy complex, only Brent crude oil was up, driven by headlines coming from Saudi Arabia that the primary OPEC member is comfortable with price increase3s above $80/bbl. This morning, the system is long, and exports are climbing, forecasted temperatures are expected to fall to levels around normal for the time of year with a pick-up in wind and solar output. Spot prices are down, while oil and coal are up slightly; longer dated contracts are up slightly in very early trade action.
Thursday 20th September 2018 - Power prices dropped in early trade action before turning around to close out the day in positive territory. The spot market made the strongest gains as the market was more concerned with a rebound in coal and carbon prices which drove the European energy complex. This morning, carbon coal gas and power are all up, the system is marginally short, but the latter is unlikely to be much of a focal point. Temperatures are now forecasted to dip slightly below normal for the time of year across NW Europe and the UK.
Friday 21st September 2018 - Prices yesterday had an unsure retracement following a bounce in carbon and power prices while coal and oil were flat or down day-on-day. This morning, the system is long with exports coming off from 40mcm to 20mcm. Weather for next week is expected to dip slightly below normal for the time of year which has supported next week contracts. Coal, oil and carbon prices are all up in early trading supporting gas prices and pushing further gains.
Monday 24th September 2018 - Gas prices moved at the close of the week, driven by the broader energy markets or by the underlying fundamentals but by a sharp drop in the pound against the euro and the dollar. Gas prices on the continent hardly moved on Friday, owing to euro strength. This morning the system is slightly short partially driven by exports and partially by a sharp drop in wind power output and a turn in the weather to below normal temperatures, the remainder of the 15-day forecast predicts gradually increasing temperatures. This morning the markets are up on increases in coal, oil, power and carbon with bullish new coming from OPEC and supply tightness in the European power sector.
Tuesday 25th September 2018 - Gas prices made increases yesterday on the back of cold weather, low wind output and a short system, the result of which boosted spot prices and bullish sentiment; gains in oil and coal also provided a lift to prices. This morning, the system is slightly long as the wind picks back up and temperatures start to warm up into tomorrow.
Wednesday 26th September 2018 - Gas prices moved down yesterday, whereas this morning, the system is again oversupplied, and spot prices have slipped modestly in early trade action. Gas, is down along with coal, carbon and power, in both the UK and on the continent, with only oil holding gains. Weather forecasts have come in a touch warmer from yesterday with a bit more wind in the forecasts as well.
Thursday 27th September 2018 - Gas price continued to retrace yesterday weighed down by oversupply in the spot market coupled with a sell off in oil, carbon and power. The long UK system is forcing spot prices down again today and applying pressure to forward contracts, weather forecasts have been revised slightly warmer and windier as well. Oil is up modestly while coal, gas carbon and power are trading lower in early action.
Friday 28th September 2018 - Gas prices cut down again yesterday, driven down by an oversupplied system, coupled with a dip in coal and a modest increase in renewable power production. This morning, flows from Norway have dropped by almost 30mcm to the UK after being rerouted to the continent, exports from the UK remain flat at about 20mcm so stock withdrawals or a decrease in exports will be needed to balance the system. Coal, carbon and oil prices are up in early trade action taking gas prices up with them power prices are mixed with some weakness at the front and strength on the longer dated contracts.
Market Comments October
Monday 1st October 2018 - Gas prices fell on Friday, driven by spot price weakness as the European energy complex shrugged off the increases made by oil. This morning, Gas prices are again under pressure with the system being almost 30mcm over supplied driven by a drop in exports to the continent and a ramping up of imports from Norway that have flooded the market. Forecasted temperatures are oscillating around normal for the time of year and renewable production is above normal.
Tuesday 2nd October 2018 - Yesterday’s gas prices went on a bit of a rollercoaster ride with both spot and curve prices dropping sharply at the open on the back of an oversupplied market and robust wind output, only to rally in the early afternoon to come back to flat and then post gains on the day. This morning, flows are increasing from both Norway and Russia and the UK system is slightly long, coal and oil prices are up modestly as are carbon and power prices.
Wednesday 3rd October 2018 - Gas prices and the broader energy complex sold off yesterday on the back of both fundamental and fuel inputs. This morning, markets are again softer despite a minor shortfall in supplies to the UK spot market driving the system into short territory. Coal, carbon and power are all softer today and gas is moving with the group into a further discount.
Thursday 4th October 2018 - Gas prices were mostly sideways after trading to both increases and losses during the day, yesterday. Contracts closed out the day in the UK with the balance of winter-18 contracts, Nov-Jan and Q1-18 losing some ground while longer dated contracts made minor gains. This morning, the system is balanced, flows are broadly unchanged and gas prices are a touch softer in early trading, oil is up, coal is down, and emissions are sideways.
Friday 5th October 2018 - Gas prices recovered yesterday after selling down the day prior. Strength in gas was driven by a rally in crude prices, which lifted the backend of the curve, longer dated seasons, while spot prices and the balance of winter were up in sympathy. This morning, the system is balanced, weather forecasts are slightly milder for next week and flows have increased marginally from Norway and Russia. In early trade action gas is down, with coal and carbon while oil is up slightly.
Monday 8th October 2018 - Gas prices rebounded on Friday making minor increases, gas was buoyed by a rally in carbon and gains in power, despite a dip in prices for both coal and oil. This morning, both oil and coal prices are down, the system is slightly long, and renewables generation is picking back up. Gas prices are down this morning in early trading mild temperatures and a weaker energy complex are applying downward pressure.
Tuesday 9th October 2018 - Gas prices took a beating yesterday, falling across all contracts, with the spot price taking the greatest fall, over 3p/therm. Losses were not restricted to the UK, gas prices on the continent were also down, the market was oversupplied, and the forecasts show mild weather for the entire 15-day forecast with good wind power output for the UK. This morning, gas is trading around the level of the close. Coal and oil are up modestly while power prices are mixed, trading around the previous close.
Wednesday 10th October 2018 - Gas prices dropped yesterday, coming under pressure from an oversupplied spot market coupled with downward pressure from both falling coal and carbon prices. This morning, the market continues to come under some pressure as carbon and oil prices dip. Forecasts stay above normal for the 15-day period with strong solar and hydro production while wind power is expected to be below normal for the 15-day period.
Thursday 11th October 2018 - Global financial markets seem to be the overall theme these days, starting yesterday and continuing throughout the night. Rate increases in the US seems to be the main driver, and this had led to doubt about the effect on the overall world economy. During yesterday and the night, we have seen oil come off from 85 $/bbl. to currently 82 $/bbl. while coal has dropped more than 5 $/ton in the last 2 days. This coupled with warm weather has sent gas prices down, and the slide looks to continue today.
Friday 12th October 2018 - Sell-off continued yesterday hitting oil, carbon and coal, driving down European gas with it. On top of this, weather forecasts were mild, and the system well supplied. Already during the day yesterday, we saw some recovery in carbon especially, that even managed to close in positive territory. Coal, oil and carbon have all also improved from lows of yesterday, and gas is up from the morning. Weather is also slightly colder in today’s forecasts. There is a lot of nervousness in the market right now, and it seems even the energy markets are watching stocks at the moment.
Monday 15th October 2018 - Sell-off continued yesterday hitting oil, carbon and coal, driving down European gas with it. On top of this, weather forecasts were mild, and the system well supplied. Coal, oil and carbon have all also recovered from lows of yesterday, and gas is up from the morning. Weather is also slightly colder in today’s forecast. There is a lot of nervousness in the market right now, and it seems even the energy markets are watching stocks at the moment.
Tuesday 16th October 2018 - Despite a strong start to the day yesterday, the market closed unaffected for most contracts. Coal traded up 1.5 $/ton from the morning but did come off during the day. It still closed almost 1 $/ton up on the day. An announcement from the UK, that they would exit the EU ETS in the event of a No Deal seemed to spur selling interest in the market. This led to the lowest closing on carbon since August and countered the initial lift we saw to gas prices yesterday morning. This morning the market has opened slightly up in the front on a confirmed drop in temperatures over the next 7-10 days, but neither coal, oil or carbon have moved, and the gas market is likely to take inputs from these markets.
Wednesday 17th October 2018 - Gas markets challenged fuel-related bullishness and fell across the curve yesterday. We saw a bounce in carbon, coal and oil, but nothing could keep gas from falling. With temperatures above normal right now, the system is well supported. But temperatures are expected to fall 5-6 degrees in the coming 2 weeks, but this doesn’t seem to scare the gas market right now. BREXIT talks are going into a decisive phase right now, with the EU summit tonight and tomorrow. Any news from that is likely to move the pound, and this will impact UK gas prices, so keep an eye out for news in that regard.
Thursday 18th October 2018 - Gas prices fell sharply yesterday, driven down on the spot by the weight of a very oversupplied system, 40mcm long, coupled with weakness in oil prices after US storages had a surprising 4th weekly build when a drawdown was anticipated. This morning, the system has swung from well oversupplied to balanced, coal and oil prices are down as is carbon in early trade action. Gas prices are mixed with spot prices making a rebound while the balance of winter is down slightly.
Friday 19th October 2018 - Gas prices closed out yesterday’s session flat to the previous close after taking losses throughout most of the day, losses in oil, coal and carbon drove bearish sentiment until the late afternoon when a turnaround to positive levels in coal and carbon helped the gas to a flat settle. This morning, the system is slightly long, however, prices are up for gas in both the spot and forward market following a rebound in oil which is pulling up coal and lending support to the European energy complex.
Monday 22nd October 2018 - Gas prices united on Friday with the broader energy complex, lifted by oil, coal and power while only carbon emissions closed marginally lower. This morning, the system is balanced, temperature forecasts have been revised warmer after next week and wind output is coming in very strong for the next few days. Essentially, the market is well supplied with stable flows from Norway, and spare capacity remaining from Russia. Storage levels, still down year on year, are close to the 5-year average now for Europe while UK storages, conventional and LNG are very well stocked.
Tuesday 23rd October 2018 - Gas prices dropped yesterday, falling with the broader commodities complex amid a bearish day for markets worldwide. Falling Carbon and coal prices coupled with gas weakness and robust supplies to pressure power prices which, in turn lead to a virtuous bearish cycle which pushed gas prices lower. This morning, the system is almost 20mcm long as demand for gas has been seen to drop on robust wind power production and mild temperatures.
Wednesday 24th October 2018 - Gas prices dropped yesterday, coming under pressure from a bearish mood in the stock markets coupled with a 4% drop in oil and softer coal prices. This morning, prices have rebounded in gas as oil ticks up, while coal and carbon find their feet and make increases. The system is also short this morning, which has given rise to spot prices which are expected to help in supporting the curve. Temperatures are expected to fall into the weekend with a corresponding dip in wind output before temperatures return to normal levels in November.
Thursday 25th October 2018 - Gas prices were softer yesterday, driven down by continued bearish sentiment and lower prices for oil and coal, some support was noted on longer dated contracts like Sum-20 and forward which looked attractive relative to the strength at the front of the curve. This morning, the system is long again, the broader energy complex, coal, oil and carbon are all dealing lower and natural gas is following.
Friday 26th October 2018 - Gas prices were under pressure yesterday with prices sinking from the spot to the balance of the winter, while longer dated contracts were mostly unchanged to slightly up. This morning, the system is balanced as temperatures dip below normal, flows remain flat and wind output remains robust. Gas prices are mostly unchanged except for spot prices which are up as temperatures fall and the wind will diminish into the weekend.
Monday 29th October 2018 - Gas prices dropped on Friday, drifting lower across all contracts from the spot to longer dated seasonal and calendar products. Gas prices were brushed up in the same bearish sentiment washing over the rest of the European energy complex, which pressured coal, power and carbon credits. This morning, the system is long 15mcm, demand has picked up with cooler temperatures however, flows to the UK have outpaced the increased demand with rising volumes from Norway the Netherlands and LNG send out. UK temperatures are expected to be at or just slightly below normal.
Tuesday 30th October 2018 - Gas prices staged a relief rally yesterday driven by short sellers buying back positions prior to expiry. By contrast to the rally in gas, prices for continental power, carbon and oil were all dealt lower. This morning, the system is long, temperatures are rising, wind output is up, and flows remain high and steady. Gas prices are down in early trade action with lower coal and oil prices.
Wednesday 31st October 2018 - Gas prices came off yesterday with the broader energy complex, coal, oil, carbon and power all slid taking gas with them. This morning, energy markets are recovering with stock market moves from yesterday and a good start this trading day. Gas is strengthened by a short system as supplies dip on lower prices. Increases in gas are, so far, half of the losses from yesterday.
Market Comments November
Thursday 1st November 2018 - Gas prices dropped yesterday, coming under pressure from falling crude and coal prices. This morning the system is short, on a dip in supplies from the UK offshore production sites. Despite the tight supply/demand balance gas prices are off slightly in early trade action as carbon, coal and oil prices have slipped slightly lower with the opening bell.
Friday 2nd November 2018 - Thursday’s gas prices were further beaten as both coal and oil took a beating dropping more than $2 each as talk of oil shortages turns back again to oil glut. This morning, the system is long putting modest pressure on spot prices while forward prices on the curve are broadly unchanged. After a week of falling prices a modest rebound today is likely as short sellers take profit on their speculative positions.
Monday 5th November 2018 - ‘Friday Buyday’ seemed to be the repetition in the European gas markets on the last day of last week. After a week with declines almost every day, Friday was the day to take some profits, and the market bounced up. The cold end to November seems to be cancelled this morning where forecasts point to maintained warm weather for at least the next 2 weeks. This is sending down gas prices this morning, where front month currently is trading about 2 p/th lower than closing prices from Friday.
Tuesday 6th November 2018 - Warm weather was the main driver behind an overall bearish day in the European gas markets yesterday. The warm weather is confirmed this morning, and seems to continue towards the beginning of December, which is sending gas further down. The biggest risk right now seems to be a complete reversal in the weather, but currently there are no signs of this.
Wednesday 7th November 2018 - Gas prices were little changed yesterday in the UK despite mild temperatures and falling coal and oil prices. This morning, gas prices are up despite a minor slide in coal and oil coupled with a minor up-tick in both the Euro and the pound. Gas prices are up with carbon and a slightly tighter system that is a mere 7mcm long, the balance has been maintained with continued strong LNG send-outs even as flows from Norway and the UK offshore have declined.
Thursday 8th November 2018 - Prices have risen today off the back of an increased risk of colder weather in late November, as well as strength in wider commodities, with oil, carbon and coal all rising overnight. Temperatures remain above seasonal normal with milder weather expected to last until mid week 47. However, there is a risk of colder weather now for late November early December with a colder 45 day forecast likely off the back of latest models showing pressure building across Northern parts of the Continent. The prompt and near curve has lifted as a result. Oil has risen overnight off the back of further weakness in USD as the US mid term election fallout continues. Also, yesterday Brent rose to $73/bbl on reports that Russia and Saudi Arabia are discussing oil output cuts in 2019. However, the bears still look to be in control with US production continuing to increase, heightening fears surrounding a global oversupply.
Friday 9th November 2018 - Gas prices were softer yesterday after a sharp drop in both coal and oil prices, support for gas came from a drop in Norwegian supplies coupled with a rise in both carbon and power prices. This morning, the system is balanced, oil and coal are slightly lower while carbon is unchanged in early trade action. Weather forecasts are calling for slightly below normal temperatures at the end of the 15-day outlook which will provide support to gas prices.
Monday 12th November 2018 - Gas prices were left largely unchanged on Friday, despite lower prices for oil and coal, while carbon was left mostly flat at the end of the session. This morning, the system is long 10mcm, supplies are up to the UK by 20mcm, half from the UK offshore and half from Norway. Prices have jumped in early trading, on a confirmation of cooler temperatures set to talk hold Nov. 20 and last for the balance of the month, strengthening prices is a drop-in wind production during the same period.
Tuesday 13th November 2018 - Today, the system is balanced, despite a drop in flows from Norway. Broadly, flows into Europe are unchanged and storages are well stocked, LNG send out has drifted lower of the past 15-days on a combination of slightly lower arrivals and conservation, LNG send outs in the UK are mostly flat. Oil has fallen below $70bbl for the first time since 10th April following a huge sell off in the Asian and American markets.
Wednesday 14th November 2018 - Today, oil is down, coal has fallen further, and carbon prices are marginally down, despite this gas prices have ticked up slightly on the back of marginally cooler forecasts and a lack of any reversion to normal temperatures in the forecast. Oil dropped over 6% as fears of a global glut of oil have replaced those of a short fall. Dropping volumes from Iran and Venezuela will be replaced by ever growing volumes from the US and Russia with Saudi Arabia being forced back into the balancing roles for the world
Thursday 15th November 2018 - Gas prices relaxed yesterday, coming under pressure from a drop in coal and carbon prices, while spot prices made modest increases on a chillier weather forecast. This morning, the system balanced, demand is down and flows from Norway are on the rise. Gas prices are dealing down slightly, however, coal, power, carbon and oil are all moving higher. Stock markets are ticking up around Europe as the British PM has moved the BREXIT ball a little further down the field getting sign off from her cabinet.
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