Gas prices initially opened lower but rallied higher as the session progressed to close at a premium. Carbon and coal prices supported contracts at the back of the curve, while the near-curve was dictated by high storage injections, a weak LNG outlook and a lack of wind generation which increased CCGT demand.
Gas prices on the near-curve recorded small gains during yesterday’s session, with weak LNG supply and a rise in storage injections offering support. However, resistance was provided by improved Norwegian flows which resulted in an oversupplied system. Sentiment further along the curve was slightly bearish despite rising coal prices as the oil market stabilised.
Gas prices moved higher during Tuesday’s session as demand for storage injections increased and low wind levels resulted in higher gas-fired power generation. LNG supply was also low due to higher Asian prices, while rising fuel markets supported prices at the back of the curve.
Gas prices increased strongly on Monday with the coal market providing on-going support across European energy markets. Oil prices inched down following significant upward movement on Friday, while a comfortable system helped to limit gains at the front of the curve.
Movement along the gas curve varied on Friday with an increase in Norwegian and UKCS flows weighing on near-curve prices, while stronger fuel prices supported the far-curve. Several outages were resolved which resulted in improved supply coming into the UK, while oil rose to almost $80/b and coal was supported by higher Asian demand and some supply issues.