Apollo Energy publish a daily energy market analysis, focusing on the gas, power and oil markets, including a commentary on how the markets close and open. Our analysis provides insight on what is currently affecting the market and also considers various factors which could dictate price changes in the future.
The report also contains a graph which tracks the one-year forward price of both gas & electricity as well as changes to Brent crude oil.
LNG send-outs, BBL flows and Norwegian imports all ramped up yesterday, sending the UK gas system into oversupply which resulted in losses across the near gas curve. Warmer temperatures are also expected to return next week which will reduce demand levels, further weighing on prompt contracts. However, rising Brent limited some of the bearish movement further along the curve.
A warmer weather outlook for next week helped to weigh on gas contracts yesterday afternoon, with further downward pressure coming from healthy LNG flows. Gas demand in the UK increased once again yesterday which supported prompt contracts in the morning, while rising Brent helped towards gains on the far curve.
Gas consumption increased once again yesterday as temperatures were at their coldest for two weeks; residential demand rose by 15mcm to 189mcm. LNG flows remained healthy with further deliveries expected in the UK before the end of the month which helped to limit some of the gains, although the gas system remained short. A late rally in oil prices also offered support to far-curve contracts.
Gas prices fluctuated on Monday; initially opening at a premium, falling in the afternoon and then rebounding before the end of the session due to a rise in oil. The cooler weather forecast for this week supported near-curve prices in the morning but comfortable supply levels helped to erase some of these gains as the session progressed. Improved Norwegian flows helped towards a long UK gas system, while the short-term LNG outlook also remains healthy.
The French President has announced closures at nuclear reactors from 2018, as well as a commitment to a minimum price for carbon emission allowances, resulting in strong upward movement on the power market.