Gas prices strengthened across the board yesterday with support provided by rising oil prices, higher storage injections, unplanned outages and an expected rise in demand. Below average temperatures are forecast for next week which will lead to an increase in residential demand, while US sanctions on Iran has resulted in a bullish oil market.
Following a bullish open, the majority of gas contracts declined over the course of Wednesday’s session, with downward pressure provided by a weaker demand forecast. However, the back of the curve was supported by a strengthening oil market as stock levels in the US continue to increase.
The warm weather ended with the bank holiday weekend and the cooler outlook for this week offered support to near-curve gas contracts in the morning. Flows via the Langeled pipeline improved but the system was slightly short, while a rise in coal and oil provided bullish pressure at the back of the curve.
Gas prices inched higher on Friday due to supply constraints which resulted in a short system. However, the prompt shed from its price as demand levels were set to fall over the weekend thanks to warm weather. Further out, prices inched higher with support coming from rising fuel markets and a weak Pound.
Following a bearish open, gas prices increased due to a rebound on fuel markets. The system was slightly short but contracts were pressured down in the morning by a warm weather outlook for the weekend. However, weak LNG send-outs and some supply constraints caused by outages in Norway, limited the losses.