A milder weather outlook for the rest of the month and a sharp drop in oil prices helped gas contracts move down across the curve on Wednesday. The system remained oversupplied despite maintenance at a Norwegian gas field, while weaker coal also contributed to losses. In other news, production cuts in Holland were delayed for 12 months, providing additional bearish pressure.
Prices moved down yesterday due to an upward revision in temperature forecasts for the rest of the month, pointing to weaker demand levels. Coal and oil markets also displayed strong losses which helped contracts at the back of the curve move down, although the Euro continued to strengthen against the Pound, limiting some of the losses.
Demand levels reached their highest levels in 2017 so far, pushing contracts higher yesterday. This resulted in a rise in European exports into the UK, although healthy Norwegian supply helped to relieve the strain. Further out, a weaker Pound provided support but coal and oil moved down in the afternoon, limiting the gains.
Gas prices moved higher on Friday with a cold weather outlook the main factor behind bullish movement at the front of the curve. UKCS production also decreased and gas demand was expected to be 27% above the seasonal norm today. Further out, contracts were supported by a rise in coal prices with a worker’s strike scheduled in South Africa on the 19th of November.
A long system and milder weather helped near curve gas prices stabilise yesterday, with almost no change expected to temperatures today. Support was provided by an increase in storage withdrawals, while French nuclear issues continued to impact gas and power contracts. Movement further along the curve was minimal as oil prices stabilised and coal displayed a small drop, offsetting the effects of a weak Pound.