Gas prices posted gains on Thursday ahead of the expiration of a number of contracts, with strong upward movement on the commodity market also a key factor. Oil prices increased on the back of Wednesdayâ€™s announcement in regards to production cuts which supported the far-curve. A weaker supply picture also provided bullish pressure at the front of the curve following another drop in Norwegian flows, while a weaker wind forecast will result in higher gas-fired power generation.
Unplanned outages at Norwegian facilities resulted in bullish movement on the near gas curve yesterday afternoon; maintenance at the Skarv field has reduced export capacity in Norway by 10mcm. Further out, contracts found support from a jump in oil prices as it was announced that major oil producers have agreed to production cuts.
A combination of improved Norwegian flows, a weaker demand outlook and a drop in oil prices resulted in bearish movement across the gas curve on Tuesday afternoon. However, the UK gas system was short due to an unexpected outage at the St Fergus terminal, despite reduced gas-fired generation. Elsewhere, Shell have announced that a further two compressors will be installed at the Ormen Lange gas field next year which will increase capacity by 20mcm.
Gas prices displayed mixed movement during yesterday's session as contracts on the near-curve found support from weaker Norwegian supply which was caused by unplanned outages. In contrast, far-curve contracts decreased despite a jump in oil prices as traders corrected down from last week;s strong gains.
Gas prices moved higher on Friday on the back of outages in Norway, with planned maintenance at the Kollsnes facility scheduled for today, until the 30th of September; reducing flows by 46mcm. A long UK gas system failed to have much influence on prices as a weaker Pound provided additional support.