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 contracts displayed mixed movement on Friday with weakening oil prices applying downward pressure on the far-curve. However, weak economic data coming out of the UK and another drop in the Pound helped to support prices at the front of the curve. Low Norwegian flows and reduced LNG-send-outs also tightened supply and contributed to the gains.
Numerous gains could be observed across the gas curve on Thursday as a result of a very under-supplied system. Weaker coal and oil contracts provided some resistance further along the curve but short supply dictated the overall sentiment. Norwegian flows and UKCS production are lower due to outages, while a lack of deliveries has reduced LNG send-outs.
Weaker Norwegian flows and an increase in coal-fired power generation (on the back of higher cooling demand due to warm temperatures) lifted gas contracts on the near-curve yesterday. Elsewhere, there are no LNG deliveries scheduled to arrive in the UK until the 27th of July which resulted in a drop in send-outs, also offering further support to the curve.
The UK gas system remained short yesterday as an increase in gas-fired power generation and higher exports to Belgium lifted demand levels. Weaker UKCS and Norwegian flows also reduced supply levels, as did a drop in LNG send-outs; this helped towards gains on the near-curve. Further out, winter contracts displayed some decreases following strong upward movement on Friday.
Winter gas prices displayed a downward correction yesterday following Friday’s surge; last week’s increase was a result of Centrica’s announcement regarding the long-term outage at the Rough storage facility. However, contracts on the near-curve moved higher as the UK gas system fell short due to a rise in exports, weaker Norwegian flows, a drop in UKCS output and lower LNG send-outs.