Near-curve gas prices displayed losses yesterday as temperatures are expected to rise above the seasonal norm over the next few days and wind levels have increased slightly; resulting in weaker LDZ and CCGT demand. Meanwhile, movement at back of the curve was minimal due to a stable session for both coal and oil markets.
A milder weather outlook for the rest of December continued to dictate the near gas curve yesterday as demand levels are set to decrease. Overall movement was bearish despite a tight system caused by the halt in UKCS production. Further out, a rise in coal prices capped some of the losses, while oil was almost unchanged.
Gas prices moved down on Friday following a volatile week, with downward pressure provided by a milder weather forecast for the start of this week. Supply fears caused by the Forties shutdown also eased, helping towards losses on the near-curve. Meanwhile, movement further along the curve was more subdued as coal and oil markets stabilised.
Gas prices initially opened lower yesterday on the back of a milder weather outlook for next week, the resumption of flows at Baumgarten and the return of the Troll processing facility in Norway. However, a fresh outage in Norway and the closure of the Forties pipeline provided support in the afternoon, helped by a rebound on coal and oil markets.
Flows at Baumgarten resumed within 24 hours following the explosion on Tuesday, while it was confirmed the Forties Pipeline would be offline for 2 weeks, resulting in downward movement on the gas curve. The system was 40mcm short but the Troll facility was expected to return today, with milder weather forecast for next week, limiting the effects of short supply.