Gas prices closed at a discount despite a bullish opening, with downward movement on the oil market weighing on contracts in the afternoon. Gas demand was well above the seasonal norm which resulted in an undersupplied system and temperatures are not expected to improve drastically next week. Meanwhile, coal prices rallied higher which limited some of the losses on the far-curve.
Temperatures across Europe were below average yesterday, resulting in tight gas systems and contributing to gains on the near-curve. Coal prices also rebounded strongly, while Brent was relatively stable, restricting losses at the back of the curve. UK demand was 37% above the seasonal norm and the system was short despite an increase in Langeled flows and stronger LNG send-outs.
Gas prices displayed further losses on Tuesday with the help of a milder weather forecast for next week, weakening oil and an improved supply outlook. Day-Ahead was the only contract to move higher as below average temperatures were expected across Europe today. In other news, coal continued to decrease as China revealed efforts to take prices to a ‘reasonable’ level ahead of high summer demand.
A colder weather forecast for the start of this week forced near curve gas contracts higher on Monday, with maintenance work in Norway also a supportive factor as imports into the UK have dropped. The Euro strengthened against the Pound following the first round of results in the French presidential election, also contributing the gains. However, some contracts on the far-curve recorded a loss with direction coming from a weaker oil market.
Gas prices strengthened on Friday afternoon on the back of a colder weather forecast for this week, with weaker Norwegian flows via the Langeled pipeline also a supportive factor. However, upward movement was less visible on the far-curve as weakening oil helped to weigh on contracts.