Gas prices moved down on Monday, shaving off some of the significant gains which were recorded last week. Weakening coal and oil markets helped to weigh on the far-curve, while improved Norwegian supply and an expected rise in temperatures later in the month contributed to losses at the front of the curve.
A cold weather forecast for the rest of February helped gas contracts move higher on Friday, with a weak LNG outlook and low storage levels also fuelling the bullish sentiment. Meanwhile, Norwegian exports to mainland Europe decreased and there was little support provided by the coal and oil markets.
Gas contracts added to their price on Thursday with an unplanned outage at the North Morecambe gas field and a colder weather forecast providing support. The expected drop in temperatures will lead to a rise in residential heating demand, while lower wind levels will result in an increase in CCGT generation.
Colder temperatures continued to push gas contracts higher yesterday, with a reduction in Russian flows via the OPAL pipeline also providing support. The drop in Russian supply was a result of a dispute between Gazprom, the EU Commission and PGNiG in Poland. A rise in coal and oil contracts and limited storage levels were also bullish factors.
Near-curve gas contracts moved higher yesterday with support coming from a strengthening coal market and an expected drop in temperatures in the second half of February. Storage levels were close to record lows across Europe, with an outage at the Rough storage facility continuing to fuel bullish pressure in the UK.