The gas curve displayed mixed movement on Friday as there was little change to fundamentals and the market volatility caused by Thursdayâ€™s ECB meeting settled down. The UK gas system opened long which helped contracts on the near-curve shed from their price, while strong Brent resulted in some gains further out.
A lower demand forecast for the next few days helped to weigh on near-curve gas contracts yesterday. Contracts were unaffected by a drop in LNG send-outs which resulted in a short UK gas system, with higher Norwegian and Dutch flows improving the short term supply outlook. Movement further along the curve was generally mixed with direction coming from volatility on the oil and currency markets.
Most gas contracts decreased yesterday afternoon as supply levels were comfortable and slightly milder temperatures led to a drop in demand. LNG send-outs increased from 38mcm to 66mcm with two deliveries expected to arrive in the UK this week, resulting in an oversupplied system. A rise in oil prices helped to support some contracts further along the curve but overall sentiment remained bearish.
A mild weather forecast and a bearish oil market resulted in downward movement on the gas curve yesterday afternoon. Brent initially opened at its highest level since November but fell throughout the session, with the downward sentiment transferring to the gas market. Elsewhere, the supply picture was slightly weaker than previous sessions which helped to restrict some of the losses.
Near-curve gas prices displayed mixed movement yesterday, as a lower demand forecast weighed on some contracts, while a drop in Norwegian flows and weaker Dutch production supported others. The milder weather outlook for the coming days and healthy stocks should help to pressure down the front of the curve this week but rising Brent continued to lift contracts further out.