An expected drop in temperatures last night and a colder weather forecast for next week provided support to the prompt and near-curve gas prices yesterday. Further out, contracts moved down later in the session as coal and oil markets turned bearish.
Improved temperatures and healthy supply levels helped to weigh on prices across the near gas curve yesterday. Norwegian supply was comfortable and LNG send-outs remained strong with 4 deliveries scheduled to arrive this month. Further out, contracts moved higher later in the session as the coal market continued to strengthen due to potential supply disruptions in Australia.
The initial impact on prices following the decision to cut production at Groningen was quite subdued on Thursday; the 12 bcm/year quota is now scheduled for October 2022, later than originally targeted. The prompt was one of the few contracts to display a large gain due to a tight system and a colder weather forecast for the bank holiday weekend.
Near-curve gas contracts moved down yesterday afternoon following a bullish opening, with a lower demand outlook expected over the Easter weekend and a rise in LNG send-outs helping towards bearish sentiment. Further out, prices found support from a likely cut in production at Groningen, as well as a strengthening coal market.
Supply concerns pushed gas contracts higher yesterday afternoon as colder temperatures are forecast for next week, while storage levels remain low. An announcement is also expected from the Dutch government on Thursday in regards to further production cuts at the country’s largest gas facility in Groningen. Meanwhile, coal prices displayed a strong rebound due to a potential miner striker in South Africa, supporting contracts at the back of the curve.