Gas prices climbed higher on Friday as a significant drop in wind levels and cold temperatures were expected today, increasing demand levels. IUK flows improved slightly and this helped to balance the system. Meanwhile, oil prices strengthened and this helped contracts on the far-curve close at a premium.
The short-term weather forecast points to colder temperatures over the weekend and the start of next week which helped towards gains at the front of the gas curve on Thursday. Brent and coal markets stabilised somewhat but the majority of far-curve prices still climbed higher.
A downward revision in temperatures for the next 7 days helped towards some increases on the near-curve yesterday. The upward movement was limited by strong wind levels which reduced CCGT demand and resulted in an oversupplied system. Meanwhile, coal shed from its price and oil stabilised, restricting gains at the back of the curve.
Gas prices decreased on Tuesday with weak demand levels and falling commodity markets the main market drivers. The system was balanced but further unplanned outages in Norway offered some support to the prompt. The far-curve weakened as coal prices decreased due to Chinese workers agreeing to postpone holidays next month to avoid supply shortages.
Gas prices moved down yesterday afternoon despite an expected drop in temperatures and wind generation at the start of February. Improved Norwegian supply helped to weigh on the near-curve, while comfortable renewable power reduced CCGT demand. Contracts at the back of the curve also shed from their price and were dictated by losses on the coal and oil markets.