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 initial impact on prices following the decision to cut production at Groningen was quite subdued on Thursday; the 12 bcm/year quota is now scheduled for October 2022, later than originally targeted. The prompt was one of the few contracts to display a large gain due to a tight system and a colder weather forecast for the bank holiday weekend.
Near-curve gas contracts moved down yesterday afternoon following a bullish opening, with a lower demand outlook expected over the Easter weekend and a rise in LNG send-outs helping towards bearish sentiment. Further out, prices found support from a likely cut in production at Groningen, as well as a strengthening coal market.
The Dutch government has announced that it will cut production at the Groningen gas field to 12 billion cubic metres (bcm) per year by 2022, with extraction at the site completely halted by 2030.
Supply concerns pushed gas contracts higher yesterday afternoon as colder temperatures are forecast for next week, while storage levels remain low. An announcement is also expected from the Dutch government on Thursday in regards to further production cuts at the country’s largest gas facility in Groningen. Meanwhile, coal prices displayed a strong rebound due to a potential miner striker in South Africa, supporting contracts at the back of the curve.