Most gas contracts displayed small gains yesterday as wind generation levels are set to remain low next week and storage withdrawals increased, supporting prices on the near-curve. Overall supply levels are generally unchanged, while oil prices were rather stable and did little to influence the far-curve in either direction.
Gas prices continued to display mixed movement yesterday ahead of the start of the new gas year this coming Friday. The short term weather outlook in the UK is set to be rather mild over the next few days, while LNG supply remains healthy and the Pound strengthened; resulting in losses for some near-curve contracts. Meanwhile, a drop in wind levels could result in higher gas-fired power generation which restricted some downward movement.
The gas market was closed yesterday and Friday due to the Easter holidays but the general sentiment remained bearish. An upward revision in the UK weather forecast for later in the week points to above average temperatures which should help reduce demand. However, Norwegian and Russian gas flows could decrease in the coming days, offering some support.
Movement on the gas curve varied on Wednesday as supply levels weakened in the afternoon and residential demand has increased due to a spell of cooler weather. However, milder temperatures are expected to return over the weekend which limited some of the upward movement. The sentiment further along the curve was generally bearish with oil prices displaying a drop.
Gas prices displayed mixed movement yesterday as most of the near-curve moved higher, while contracts further out were bearish-to-stable. A healthy supply/ demand picture helped towards a long UK gas system which weighed on prompt contracts, while the far-curve was slightly boosted by a small rebound in Brent.