Gas prices moved in different directions throughout last week. Price increases were caused by:- short system supply in the UK, increasing Oil prices, production cuts and a weakening pound. Price decreases were caused by a sometimes well supplied UK system, above seasonal normal temperatures, weakening Oil prices and LNG arrival to the UK.
Today, we have seen a slightly warmer weather forecast, a long UK system and an increase in Norwegian imports to the UK. Prices have risen, as the Dutch Government still look at whether more reduction at Groningen should take place.
What specifically affected prices?
• Short UK system – drops in Langeled flows.
• Increase in Oil prices, as OPEC met in Vienna to discuss production cut extensions.
• Groningen production to be cut a further 10%, with a further cap placed on production during colder years.
• Weaker sterling against the Euro as uncertainty over the UK General Election moved in as the Conservative lead fell.
• Well supplied UK system.
• Temperatures above seasonal norm for May.
• Oil prices weakened, as President Trump plans to sell of half the country’s stockpile and better cuts were agreed than expected (9 months).