Residential demand was predicted to fall today, with improved renewable generation also reducing the need for gas-fired power. However, the system was short throughout the session due to stronger demand and weaker flows via the Langeled pipeline. An upward revision in the short term weather forecast kept any gains to a minimum, while far-curve prices were almost unchanged at the close of the session.
An expected drop in temperatures last night and a colder weather forecast for next week provided support to the prompt and near-curve gas prices yesterday. Further out, contracts moved down later in the session as coal and oil markets turned bearish.
Improved temperatures and healthy supply levels helped to weigh on prices across the near gas curve yesterday. Norwegian supply was comfortable and LNG send-outs remained strong with 4 deliveries scheduled to arrive this month. Further out, contracts moved higher later in the session as the coal market continued to strengthen due to potential supply disruptions in Australia.
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.