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.
The supply/ demand outlook looks healthier for the Easter weekend as the predicted cold spell (Beast from the East 3) is now looking unlikely, with temperatures forecast to be around the seasonal norm. This helped near-curve gas contracts shed from their price, with healthy LNG send-outs also a factor. Far-curve contracts decreased in the afternoon but losses were limited by higher oil prices.
Near-curve gas prices inched lower on Friday as temperatures for the week ahead continued to be revised higher. A weakening Asian market also transferred to European prices, while LNG deliveries could ramp up in the coming weeks. Further out, contracts largely held their price with bullish resistance provided by a strengthening oil market.
Gas prices moved down yesterday as temperatures for next week were revised higher, easing fears of a potential supply shortage. Several LNG deliveries are also scheduled to arrive in the UK over the next few days, further weighing on the near-curve. Further out, prices displayed some losses in the afternoon as coal and oil markets weakened.
A healthier supply/ demand picture was forecast for today, helping Day-Ahead gas move down yesterday afternoon. Gains recorded in the morning were erased as the session progressed as next week’s drop in temperatures is not expected to be severe. Further out, prices were pushed higher by bullish carbon, coal and oil.