Yesterday’s weather forecasts pointed towards cold temperatures for a 2-week period, starting from the end of this week; this will increase residential demand and resulted in gains at the front of the gas curve. LNG send-outs to Europe are also lower, providing additional support, while the far-curve was pushed higher by rising coal and oil.
Temperatures were forecast to turn colder later this week, continuing till the end of the month, resulting in upward movement on the near gas curve on Friday. Further out, contracts were pushed higher by increases on coal and oil markets, with APi2 coal climbing above $81/tn.
Weather forecasts for next week were uncertain yesterday and this resulted in some bearish movement at front of the gas curve. The prompt moved down on the back of a mild weather outlook for today, although CCGT demand was set to rise, ensuring any losses were minor. Further out, a downward correction in coal and oil prices helped most contracts record a loss.
Temperatures are expected to remain around the seasonal norm until the end of the week, with some uncertainty in regards to how severe next week’s cold weather will be; resulting in some volatility at the front of the curve yesterday. Further out, a strong rebound in Brent and bullish coal contributed to upward movement.
Below average temperatures are expected from next week until the end of February, fuelling bullish movement across the near gas curve yesterday. An outage at the Entry Segal pipeline also provided support as Norwegian exports will be restricted for the next 4-6 days. Meanwhile, strengthening coal markets pushed contracts at the back of the curve higher.