Gas prices weakened further on Thursday due to below average demand levels and improved supply. An oversupplied gas system resulted in a sizeable loss on the prompt, with residential demand 33% below the seasonal norm. Gas-fired power generation also declined due to an increase in wind production.
The UK gas system was short yesterday due to the outage at the Kollsnes processing plant in Norway. However, gas prices largely ignored this drop in supply and significant losses were posted across the curve due to falling oil and a weak demand forecast. The outage in Norway was also expected to be resolved today which limited its impact.
Gas prices displayed mixed movement during Tuesdayâ€™s session as a slight rise in oil prices supported contracts on the far-curve, while the mild weather outlook weighed on the near-curve. Overall supply levels were comfortable as an increase in wind production led to a reduction in gas-fired power generation.
Gas prices continued on a bearish trend on Monday as a mild weather/ weak demand outlook and falling oil prices weighed on contracts across the curve. Meanwhile, the gas system was short throughout the session due to an outage at the Rough storage facility and a rise in gas-fired power generation, however, this did little to lift prices.
Gas prices decreased on Friday on the back of a mild weather forecast for the rest of December, with further bearish pressure coming from falling oil prices. The UK gas system was short due to a number of outages in Norway but this did little to curb the losses.