Gas prices displayed mixed movement on Tuesday with contracts at the front of the curve climbing higher as cold weather has pushed up demand, with below average temperatures expected to continue throughout December. Prices further along the curve were generally stable with oil prices failing to provide much support.
Cold temperatures and reduced imports from Norway resulted in a tighter gas system yesterday which led to gains at the front of the curve. The drop in temperatures saw demand levels rise to 27% above the seasonal norm with a further increase expected today. Meanwhile, an outage at the Heimdal platform restricted Norwegian exports by 13mcm compared to last weekâ€™s average. Another drop in the Pound and gains on the oil market also helped to support gas contracts further out.
Near-curve gas prices moved higher on Friday as two unplanned outages reduced UKCS production, while weaker Brent helped to weigh on contracts on the far-curve. Demand levels across Europe are also set to rise over the coming weeks which offered further support to prices at the front of the curve.
Gas prices erased the morningâ€™s downward movement in the afternoon with a colder weather forecast for next week offering support at the front of the curve. Meanwhile, Commodities were stable due to the Thanks Giving holidays in the US which resulted in minimal movement further along the curve. In terms of supply, UKCS production continued to improve as an outage was resolved but Norwegian flows were slightly reduced.
Winter gas contracts posted minor gains yesterday afternoon with nuclear power issues in France continuing to have an effect on the gas market. The Pound strengthened following yesterdayâ€™s Budget announcement and helped to restrict some of the upward movement, although unplanned outages supported prices on the near-curve.