Gas prices moved higher yesterday afternoon due to a short system and a rebound on the coal market. Low renewables lifted CCGT demand, contributing to the undersupplied system. Carbon prices also remained bullish and additional support was provided by planned industrial action at sites in the UKCS.
Gas prices eased down on Friday with a drop in coal prices the main factor behind losses at the back of the curve. Reduced Chinese demand over the last few weeks has boosted coal stocks, resulting in a bearish market. Meanwhile, a rise in renewable levels resulted in slightly lower CCGT demand, weighing on the prompt.
Minor upward movement could be observed across the gas curve yesterday despite bearish coal and oil markets. Instead, prices were dictated by a rise in CCGT demand as a result of weak renewable power, with stronger carbon contracts also a bullish factor.
Gas prices climbed higher during yesterday’s session as oil prices displayed a rebound and coal recorded a strong gain. The supply picture was also weaker as maintenance at the Nordstream pipeline restricted flows around Europe. Meanwhile, the Pound weakened against the Euro which provided additional support to the NBP gas market.
Any movement on the gas curve was minor yesterday as the effects of weaker coal were offset by a slight rebound on the oil market. The near-curve was also slightly supported by on-going maintenance at Russia’s Nordstream pipeline which has restricted flows around Europe.