Gas prices increased significantly yesterday following an explosion at Baumgarten, a major natural gas hub in Austria. This news followed the shutdown of the Forties pipeline which could put UK supply levels in jeopardy over the coming weeks. Temperatures were also very cold in the UK, lifting LDZ demand, while outages in Norway reduced exports.
Gas prices surged higher yesterday afternoon following an announcement regarding the shutdown of the Forties pipeline which has halted North Sea oil and gas supply. Prices started and ended the session at a premium as cold weather lifted LDZ demand and Norwegian flows decreased due to unplanned outages.
Near-curve gas prices moved down on Friday as European temperatures were expected to be above average over the weekend, weighing on demand levels. Supply levels were also healthy in the UK, providing further downward pressure. Further out, contracts were supported by rising coal and oil markets, although a stronger Pound capped some of the gains.
Gas prices displayed mixed changes yesterday afternoon with some bullish sentiment provided by a drop in Norwegian flows and a recovery on the oil market. An outage at Kollsnes reduced flows into the UK but milder weather continued to weigh on residential demand, helping towards losses across the near-curve in the morning.
Milder temperatures are expected this month and this has weighed on near-curve gas contracts during the previous two sessions as residential demand has decreased. Healthier wind levels also reduced the UK’s reliance on gas-fired generation, helping towards a long system. Further out, prices moved down following a sharp drop in oil prices in the afternoon.