Apollo Energy publishes 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 how the markets are performing and also considers various factors which could dictate price changes in the future.
The analysis also contains a graph which tracks the one-year forward price of both gas and electricity as well as changes to Brent crude oil.
The offshore Rough gas field, the UKâ€™s largest storage facility will not inject gas until spring 2017, with a high possibility that it could remain offline until autumn that year.
Winter contracts displayed a significant increase on Friday as it was announced that the Rough storage facility will remain offline until March 2017 following a lengthy inspection. Rough accounts for 70% of the UKâ€™s storage capacity and the majority of the nationâ€™s back-up supply will now come in the form of more expensive imports from Europe. The lack of storage injections will result in a long system with surplus supply exported to Belgium via the IUK pipeline.
The Pound strengthened against the Euro yesterday as the Bank of England decided not to cut interest rates; this helped to pressure down gas contracts on the near-curve. Norwegian supply also increased which led to an oversupplied system and a jump in exports to Belgium. Meanwhile, a rise in oil and gas contracts offered support further along the curve.
Ageing gas storage facilities in the UK could result in an increase in maintenance and a reliance on European imports in order to meet demand; potentially leading to sharp increases on the gas market.
The majority of gas contracts shed from their price on Wednesday as Brent decreased throughout the session following gains on Tuesday. The prompt was one of the exceptions to the downward movement as the UK gas system was short due to a rise in demand and weak Norwegian imports.