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.
Demand levels are expected to be slightly higher this week which helped to push near-curve gas contracts higher on Monday. Meanwhile, coal prices strengthened due to a drop in Australian production as a result of Cyclone Debbie, offering support further along the curve. In terms of supply, the UK gas system was balanced with exports to Belgium reaching their highest level since September 2016.
Gas prices moved down on Friday following bullish movement in the previous three sessions, ahead of the expiry of some near-curve contracts. Prices took direction from warmer temperatures which weighed on demand levels over the weekend and today, while the supply outlook was also improved.
Traders continued to close their short positions yesterday ahead of the expiry of some near-curve contracts which offered support to the gas curve. However, demand levels were low across Europe due to mild weather, with residential demand in the UK dropping 30% below the seasonal norm, limiting the gains at the front of the curve.
Gas prices moved higher on Wednesday despite a bearish supply outlook, instead direction came from traders closing their short positions ahead of the expiry of some near-curve contracts. In terms of supply, demand is low due to mild weather, while LNG send-outs are comfortable. A rise in oil prices, on the back of the latest EIA report also offered support to the far-curve.
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.