Gas prices moved higher yesterday, taking direction from bullish commodity markets, with carbon in particular displaying strong upward movement. Meanwhile, supply levels tightened due to a drop in flows which offered additional support to the front of the curve.
Gas prices were pressured down on the near-curve by a long system, with stronger wind levels weighing on CCGT demand. Temperatures are expected to return to the seasonal norm next week, which offered some resistance, while weaker commodities weighed on the far-curve.
Two unplanned outages resulted in a drop in UKCS production yesterday, while Norwegian flows also weakened, contributing to a short system despite lower CCGT demand. An expected drop in temperatures next month also limited any downward movement, while a rise in coal and oil markets helped to lift the far-curve.
Gas prices moved down during yesterday’s session thanks to an oversupplied system, with the more significant losses seen on the prompt and winter contracts. Contracts further along the curve also decreased, although a rebound on fuel markets offered resistance.
Gas prices displayed minor gains at the front of the curve on Friday, while the majority of contracts further out recorded a small loss. A sharp drop in Brent and carbon prices helped to weigh on the far-curve, while prompt and winter contracts were pushed higher by a cold weather outlook.