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.
Norwegian flows into the UK decreased yesterday which resulted in numerous gains across the curve, although some European contracts displayed no change due to various bank holidays. Early in the session Langeled output stood at 53mcm but fell to 14mcm in the afternoon which resulted in a tight UK gas system. Meanwhile, a sharp rise in oil prices continues to push far-curve contracts higher with on-going supply concerns the main market driver.
DCP 161 is a proposal launched by Distribution Network Operators (DNOs) to amend the DCUSA (Distribution Connection and Use of System Agreement). As a result Excess Capacity penalties will be introduced for Half Hourly electricity supplies and sites affected by P272 when demand levels surpass authorised capacity levels.
The majority of gas contracts displayed a loss on Friday despite a late rally by Brent which ended the session at a strong premium. The UK gas system was long throughout the session due to improved Norwegian flows and increased LNG outlook; weighing on near-curve contracts. Warmer temperatures are also expected to return to the UK before the end of the month which provided further bearish pressure.
Gas prices moved down yesterday afternoon as Norwegian flows into the UK recovered following a weak opening which supported near-curve contracts early in the session. Higher exports to Belgium also contributed to an undersupplied gas system but an improvement in supply levels helped it move closer to balance before the end of the session. Meanwhile, a drop in oil prices helped to weigh on prices further along the curve, erasing the morningâ€™s gains.
Outages at Norwegian and UKCS gas fields limited supply levels in the UK yesterday which provided support across the near curve on Wednesday. Norwegian flows fell by 15% despite the return of the Nyhamna processing plant, while UKCS flows via the Bacton terminal decreased due to maintenance. An increase in exports to Belgium also lifted demand levels above the seasonal norm despite warm weather reducing residential consumption. Meanwhile, prices further along the curve were dictated by stronger oil contracts following the release of the latest EIA report.