Gas prices displayed strong gains yesterday due to a technical rebound and low storage levels. Temperatures are set to remain mild over the coming days but should turn colder in the second week of February, offering further support to the curve.
Gas prices moved down on Friday as temperatures are expected to increase during the first week of February, resulting in lower demand levels. A rise in wind power will further weigh on demand as the UK will be less reliant on CCGT generation, losses on the oil and coal market were also factors behind the bearish movement.
Gas prices weakened yesterday with mild weather expected from this weekend on, acting as the main market driver this week. Wind power is also set to improve which will reduce CCGT generation and coal prices recorded further losses, adding to the bearish trend.
An expected drop in gas demand in the coming days, as well as weakening coal prices weighed on gas contracts yesterday. A stronger Pound also helped towards the losses, although the downward movement was slightly limited by a tight LNG outlook and low stocks.
Gas prices decreased yesterday following strong gains in previous sessions, with a milder weather forecast for next week the main market driver. Two unplanned outages in Norway continued to restrict imports but this failed to offer much support to the curve. A drop in exports via the IUK pipeline provided further bearish pressure, while coal prices also fell.