The ongoing outage at the Bergermeer storage site in Holland and an unexpected issue at the Rough facility offered support to the near-curve yesterday despite a long UK gas system. Temperatures remained mild for this time of year, lowering demand, while UKCS production also improved. Elsewhere, LNG supply remains low due to supply shortages in the Middle East and Turkey.
Gains could be observed across the gas curve yesterday with strong support provided by increases on the oil and coal markets. The UK gas system was also undersupplied, while the Bergermeer storage site was closed in Holland due to technical problems. Meanwhile, temperatures are also set to turn slightly colder over the coming days which will push demand levels higher.
On-going outages in Norway continued to limit imports into the UK on Friday and temperatures were also expected to turn colder later this week; resulting in upward movement on the near gas curve. However, withdrawals have resumed at the Rough storage facility following a six month outage, while the Pound strengthened against the Euro, limiting the gains further out.
Gas prices initially opened lower yesterday due to a low demand forecast for next week but a rise in coal and oil prices erased the morningâ€™s losses later in the session. Concerns regarding the proposed restart of the Rough storage facility also provided support to some contracts on the near-curve as nominations for withdrawal remained at zero.
Reduced flows via the IUK pipeline limited losses at the front of the curve yesterday but the sentiment remained bearish as mild weather was expected to continue today. Further out, the majority of contracts moved down, with direction coming from weakening coal and oil markets. However, the Euro rebounded against the Pound slightly which offered support to some contracts.