Gas contracts moved higher on Tuesday as demand levels are set to increase over the coming days due to an expected cold snap in the UK. Rising oil prices were also a bullish factor, although an expected increase in wind power should reduce CCGT generation, limiting some of the upward movement on the prompt.
Mild temperatures have been forecast for the second half of November, helping to weigh on near-curve contracts, while the back of the curve was pressured down by falling coal and oil markets. The UK gas system remained oversupplied and an expected rise in wind levels should reduce CCGT generation this week.
Gas prices decreased on Friday on the back of weakening coal and oil contracts, as well as strengthening financial markets. However, a delay in restarts at French nuclear power plants restricted some of the downward movement at the front of the curve. In terms of short term supply, the UK gas system remained long throughout the session despite low LNG send-outs.
Gains could be observed across the gas curve yesterday with direction coming from a stronger oil market, as the impact of the US presidential election was short-lived. Cold temperatures were also a supportive factor for near-curve contracts, despite a long gas system.
Gas prices moved higher yesterday despite a bearish opening to the session, as increases on the financial markets and an unplanned outage at the Bergermeer storage site in Holland offered support. The UK gas system was oversupplied despite reduced imports from Belgium but this failed to limit the gains at the front of the curve.