The UK gas system was short yesterday despite low demand levels, resulting in gains across the near curve. Norwegian flows were rerouted away from the UK due to a drop in Dutch output which was the main reason for the undersupply. Meanwhile, oil contracts increased and the Pound weakened against the Euro, providing additional bullish pressure on the far-curve.
Weakening commodity markets and a warm weather outlook for the rest of this week contributed to losses on the gas curve yesterday. Coal and emission contracts decreased but a late rebound in Brent helped to limit some of the downward movement on the far-curve. An outage at the South Hook terminal also reduced UKCS output and offered some support to the prompt.
Gas prices moved down during Friday’s session with bearish pressure provided by a weaker demand outlook and healthy LNG supply. The bigger losses were displayed at the front of the curve due to the milder weather forecast, while stable coal and oil markets limited the decreases on the far-curve.
Near-curve gas prices moved down yesterday afternoon as demand levels are expected to fall in the coming days and systems across Europe were comfortable. A rise in coal prices restricted downward movement on the far-curve with further bullish pressure provided by a strengthening Pound.
Gas prices displayed losses yesterday following an improvement in Norwegian flows, as the outage at Kollsnes was resolved. Milder temperatures are also expected in the coming days with further bearish pressure provided by losses on the coal and oil markets.