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.
Gas prices posted losses yesterday afternoon as a result of an oversupplied system and falling Brent. Planned maintenance in Norway failed to support the prompt, with a milder weather forecast for today and an expected drop in gas-fired power generation providing downward pressure.
A planned outage in Norway this Friday is set to last until the 3rd of November, restricting European imports by 25mcm and offering support to the near gas curve. Further support was provided by a colder weather outlook for the start of November, while gas-fired power generation remains high due to low wind production. Falling Brent did little to limit the gains further out as the Pound weakened against the Euro once more.
Gas prices found support from an increase in coal and power contracts yesterday, with weak wind production and low nuclear availability resulting in an increased reliance on gas-fired power generation. The front of the curve also found additional support from an expected drop in temperatures next week. Elsewhere, the LNG outlook is forecast to remain tight for the rest of this month and throughout November due to limited deliveries.
Gas prices moved down on Friday on the back of a milder weather outlook for the weekend and at the start of this week, with a long gas system also a factor. The system was long in the afternoon following an increase in Norwegian imports and healthy Dutch flows via the BBL pipeline which hit a six-month high. A stronger Pound also helped to apply some downward pressure, although the losses were restricted by high coal prices.
The UK gas system was short throughout yesterday’s session which contributed to gains on the near-curve. Colder temperatures resulted in a rise in demand, with weak wind generation also increasing gas usage, while LNG send-outs remained low. Further out, contracts were generally bearish on the back of weakening coal and oil.