This week, prices have moved up and down sporadically. Upwards movements were caused by weakening LNG send outs – 2 LNG cargoes which were expected to arrive at South Hook were diverted, adding pressure to UK supply, Oil prices rose, as tension in the Middle East continues the Pound also depreciated against the Euro in the midst of the UK General Election. Offering weight on the curve, drivers which pulled prices down were, warm weather in the UK, seen to be above seasonal normal (at points by around 3-4⁰C), falling Oil prices, as US inventories rise adding to current concerns about the global supply glut and following the LNG drama at South Hook, risk was eradicated from prices on Monday morning, as it was reported that the cargoes would still arrive in the UK just 10 days later than originally planned.
This morning, UK prices have fallen, on the back of warm weather and interconnector maintenance. Temperatures are warmer today in the UK, demand is 14mcm lower than seasonal normal and LDZ consumption (heating demand) is set to fall towards the end of this week. Oil prices are up this morning, as statements that OPEC-leader Saudi Arabia will make significant supply cuts to Asia are released. As we still see good supply levels from the US, this limits any rises. Maintenance beginning on the Interconnector has increased available supply in the UK. Injections are being made in the UK.