Another outage in Norway tightened the UK gas system yesterday and the LNG outlook remains weak due to a rise in Asian prices, resulting in a rise in gas prices on the near-curve. Oil prices also climbed higher in the afternoon which helped to support contracts further out, with a weaker Pound also a factor.
Gas prices moved higher yesterday as renewable power was expected to decrease even further today, leading to a rise in CCGT demand. Warm weather kept residential demand below the seasonal norm and Norwegian outages were resolved, capping the gains somewhat. Further out, any upward movement was restricted by a bearish oil market.
UK energy markets were closed yesterday due to the Bank Holiday weekend but the oil market displayed strong losses, while coal and carbon continued to strengthen. Friday’s session saw contracts across the curve close at a discount, with a healthy supply/ demand outlook the main market driver at the front of the curve.
Prompt gas prices decreased on Thursday following a bullish opening, with Norwegian flows expected to improve today and demand levels set to remain below the seasonal norm. Prices further along the curve also moved down with direction coming from weaker Brent.