Energy Market Report – Gas

  • Market Comments December

    Monday 3rd December 2018 - Prices rocketed back up this morning on the back of geopolitical moves by OPEC, Russian, Qatar and Canada. OPEC and Russia have signalled that they will continue their co-operation pact which could lead to new cuts for 2019. Canada's oil producing province Alberta has mandated oil production cuts as pipeline bottle necks have crushed prices to around $10/Bbl. Additionally, Qatar has signalled it will leave OPEC which has resulted is a minor bearish move on this mornings bulling move of 5%.

    Tuesday 4th December 2018 - Midday prices rallied yesterday due to the bullish news in the oil markets. The system has swung back to long on the increased flows from Norway, meanwhile weather forecast have been revised a touch warmer.

    Wednesday 5th December 2018 - Gas prices fell yesterday from the spot market to longer dated contracts, weakness was driven by the spot market which was down the most on increased wind expectations and ameliorating temperature forecasts. A 3% sell-off in US stock markets also rippled through the energy markets reversing gains in global commodities casting a long bearish shadow. This morning, the system is very short, 30mcm, on an unplanned outage in Norway and reduced UK offshore production. The market, however, is little changed as demand forecasts for gas are likely to be revised lower on the back of stronger wind power output eating into power sector consumption.

    Thursday 6th December 2018 - Gas prices dropped yesterday from the opening bell despite a short system, 30mcm, on the back of some unplanned outages in Norway. This morning, the system is 40mcm short as stock draws and LNG send-outs have been pared back, despite the short fall gas prices are down on a further drop in carbon and milder forecasts.

    Friday 7th December 2018 - Gas prices continued to slide yesterday, despite a very short system at the opening of markets. This morning, the system is balanced, oil is trading lower alongside gas while coal and carbon are up modestly. Weather forecasts continue to show a warming trend which will continue to keep a lid on prices.

    Monday 10th December 2018 - Gas prices closed down the previous week, while on Friday making a minor increase in the UK while continental prices were broadly unchanged. Oil increased on Friday on the back of OPEC cuts that surprised the market coming in slightly larger at 1.3M Bbl/d rather than the 1M expected. This morning, the system is marginally short on the back of an uptick in demand coupled with a slight contraction in supply and lower wind output. The market will be focused on the pound and BREXIT voting this week and what comes thereafter.

    Tuesday 11th December 2018 - Gas prices were on the rise, finding strength from a short system that boosted spot prices while increases in coal and carbon provided some lift to the longer dated contracts. A delay in the BREXIT vote was bullish UK gas, sinking the pound, causing gains in the NBP which greatly outstripped those in euro denominated continental markets, perhaps a taste of what could come from a disorderly BREXIT. This morning, the system is long, storages have made marginal gains increasing volumes in December, a rare move, while flows from Norway have increased. Prices are mostly unchanged in early trade action.

    Wednesday 12th December 2018 - Gas prices increased yesterday, with spot prices taking the lead helping to lift the balance of winter contracts while longer fated contracts were only marginally changed. This morning, prices are mostly unchanged with very few contracts changing hands as liquidity has been dropping towards the holiday season.

    Thursday 13th December 2018 - Gas prices united yesterday, moving up with coal and carbon which made outsized increases on the expiry of options trading. This morning, the system is 35mcm long on the back of increased UK production coupled with robust LNG send out. Weather forecasts are unchanged with only slightly increased wind expected and oil is also unchanged, stock markets are up as the British PM survives a confidence vote.

    Friday 14th December 2018 - Gas prices made additional increases with spot prices leading the way. Increases in supply are coming from storage and LNG send-outs as capacity holders look to free up space for additional cargos and injection capacity as demand is set to wane into the holiday period. This morning, gas prices are up slightly following early morning gains in carbon and power while coal and oil are flat.

    Monday 17th December 2018 - Gas prices united on Friday, as the European energy complex was taken hostage by carbon which bullied the market up along side continental gas and power contracts, by contrast oil fell and coal was marginally up. This morning, the system is long, oil is down while carbon and coal are marginally higher. Stock market weakness looks set to continue into the end of the year as trade wars, BREXIT and economic slowing continue.

    Tuesday 18th December 2018 - Gas prices were left largely unchanged after the close of yesterday's trading as oil dropped and carbon rallied. Increases over the last week have really pressured prices despite bearish fundamentals for gas, warm weather robust flows and high LNG send-outs. This morning carbon, coal and oil are all down as the commodity complex is under pressure from fears of a return to a global supply glut. Weather forecasts continue to look mild going into the holiday season and prices are flat to slightly down at the open of trading.

    Wednesday 19th December 2018 - Gas prices dropped yesterday driven down by a dip in spot prices and by falling oil prices which lowered the forward curve. This morning, the system is balanced, weather remains mild and the holiday slow-down in demand is almost upon us. Coal, oil and gas are trading very close to the previous close while carbon is up around half a euro boosting power prices.

    Thursday 20th December 2018 - Gas prices were on the rise near close of business yesterday, as oil rebounded, and carbon prices ticked up, the bounce in the energy complex included all commodities save for coal which was down slightly. This morning, the system is 20mcm short on the back of some minor losses in Norwegian production and a drop in send outs from storage facilities day-on-day. Gas is trading flat to the close despite the short system as the broader complex is under pressure.

    Friday 21st December 2018 - Gas prices ended the day, yesterday, up for the spot and balance of winter contracts, owing to a short system. This morning, the system has flipped back to long/oversupplied as demand falls on more mild weather and holiday workloads. Supplies have fallen with demand but remain sufficiently high, so expect some injections into storages over the coming days. Prices are mostly flat to slightly down in early Friday trading.

    Monday 24th December 2018 - Colder weather sent front contracts up on Friday. Further dated contracts dropped on continued bearishness from oil and coal. Today, the system is a little short as LNG terminals are flowing less. The latest weather forecast shows a very warm end to the year, and prices open flat in the front in a thin Christmas market. Today is only ½ a day of trading, so expect little action volume wise.

    Thursday 27th December 2018 - Forecasts were warmer than on Friday, and there is more LNG on its way to Europe. This morning we see some discrepancy between forecasts, but in general it looks warm, and the list of LNG ships is growing. Oil has rebounded from lows of 50$/bbl on the 26th, and is currently trading around 53.50 $/bbl. But with warmer weather looming for the rest of this year, gas markets are coming off this morning.

    Friday 28th December 2018 - Warm weather helped send down European gas prices yesterday. On top of a fundamentally well supplied system, oil and coal were also bearish yesterday, adding to the downward pressure on gas prices. For today, not much has changed since yesterday. There might be a slightly colder end to some of the forecasts, and an unplanned outage in Norway is supporting prices in the front this morning. Only the UK gas market is open on Monday, so this is the last day of trading in 2018 for Continental gas markets today.

    Monday 31st December 2018 - With warm weather forecasted for most of the period, and plenty of LNG on it’s way to Europe, gas markets had nowhere to go but down. Today is only going to be ½ trading day, so expect volumes to be low. Except for a few days around the 3rd of Jan, we mostly see mild weather for the next 7-10 days. Into the 2nd week of Jan things becomes a bit more uncertain, but for now average weather is forecasted.

  • Market Comments January

    Wednesday 2nd January 2019 - We ended last year with a very bearish market for European gas markets. This morning the market has come off to a bullish start in the front, while the curve is more unchanged. The front is up despite a enormously long system and warm weather for continental Europe for most part of the forecasting period. There is some uncertainty about temps in the latter half of Jan. World equity markets have come off to a bearish start of 2019, and coal and oil are down today.

    Thursday 3rd January 2019 - European gas markets came off to a strong start of 2019. It was mostly the front that was traded up on higher probability of a cold spell later in Jan. This morning we are down again on a well supplied system, warmer weather and still plenty of LNG on its way towards Europe. Coal, oil and Carbon have also started the day on the bearish side.

    Friday 4th January 2019 - Yesterday gas was also weak, while oil saw some revival. Today the weather is showing some signs of colder weather in the end of the forecasts, but the timing is still uncertain. Oil is also on the strong side, while coal and EUA’s are more unchanged. Gas is up in the front, and so is power across the board.

    Monday 7th January 2019 - The UK has opened with gas prices significantly lower than the close on Friday, with quick prices shedding huge value to start the week. The UK has turned milder in comparison with last week reducing the gas demand, with flows remaining strong. Gas demand for power has fallen to 52mcm due to higher wind levels and total demand is set to be 15mcm below seasonal norm.

    Tuesday 8th January 2019 - Gas prices came off across the board in yesterday’s session. The downward correction was most pronounced in the front end where the front months traded down around 1.3 €/MW on the Continent and around 3.5p/th in the UK. Further out on the curve prices are coming less off due oil prices seems to have bottomed out and is starting to climb again. This morning the weather forecasts confirm a tendency towards colder weather end of January and prices are rebounding.

    Wednesday 9th January 2019 - Gas prices recovered yesterday, driven up by strength in the spot market coupled with curve gains driven by increased prices for coal, oil and carbon. This morning, demand is up, however, supplies have moved higher in lock-step and the system is long 26mcm. Stock levels have remained very high for the time of year as demand waned over the holiday period. Prices are up slightly with oil and stock markets in early action.

    Thursday 10th January 2019 - Gas prices dropped yesterday, coming under pressure from an oversupplied system as temperatures are set to warm up further this week. This morning, the system is again oversupplied as demand falls and supplies increase. Prices are marginally up as gas follows on the yesterdays move in oil. Forecasts are calling for a return to below normal temperatures near the end of the 15-day forecast.

    Friday 11th January 2019 - Gas prices finished yesterday’s session broadly unchanged after see-sawing up and down over a penny through intraday volatility, despite little changes in the broader energy complex, save for coal which gained a dollar. This morning, the system is long a scant 6mcm despite a sharp drop in demand as temperatures warm up into the weekend. Gas prices are up as traders cover positions into the weekend as oil ticks slightly higher and a return to below normal temperatures is expected the following week.

    Monday 14th January 2019 - Gas prices recovered on Friday, closing up as traders closed short positions moving into the weekend over concerns of rolling cold weather forecasts which could provide a lift to prices on Monday. This morning, the European energy complex is mostly sideways with only minor increases or losses across coal, gas, power and carbon, so far, the biggest move is oil which is down 75 cents in early trading.

    Tuesday 15th January 2019 - This morning’s gas prices are retracing some of yesterday’s losses, as prices in crude halt their slide and coal makes modest increases. Gas prices are up on a more balanced system and cooler weather to come. Broadly, markets are up as china signals tax cuts to combat an economic slowdown, which are helping equities markets as well as the commodity complex.

    Wednesday 16th January 2019 - Gas prices recovered yesterday, rising with crude and coal as temperatures are set to drop. This morning, the system is long, forecasts are broadly unchanged but continue to confirm below normal temperatures for the 15-Day outlook. After last night’s BREXIT debacle, the pound has been left to gain against the euro, seemingly unfazed as a confidence vote will take place today.

    Thursday 17th January 2019 - Gas prices were varied after yesterday's session ended, a unpredictable day which saw prices drop.. This morning, the system is long as temperatures drop below normal and forecasts show that the cold weather will linger for the balance of the month. despite this length, spot prices are up with curve contracts as coal, oil and even carbon make early morning gains.

    Friday 18th January 2019 - Gas prices united yesterday as the first day of a cold snap hit most of Europe. This morning, the market is again slightly long, flows are mostly unchanged, save for a minor increase from Norway and storages are not seeing too much impact in the markets, coal is down slightly in early trading along with carbon, while oil is up leaving gas and power trading mostly flat to yesterdays close.

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