Daily Energy Market Report Friday 18th May 2018
Yesterday the NBP continued to surge in value on the back of Norwegian outages, a short system and strong oil prices.
Oil peaked above $80/bbl. for the first time since Nov 2014 and outages at Kvitebjorn, Kristin and Nyhamna all supported prompt and near curve contracts.
Today, NBP contracts have opened lower on the back of comfortable system dynamics, lower oil prices and warmer weather forecasts.
Oil prices have come off from yesterday’s highs as the market corrects itself, however we are set for the longest weekly run of gains in seven years on growing concerns over supply disruption in the Middle East off the back of OPEC cuts and Iran Sanctions.
As well as the ongoing issues in Venezuela where they are struggling to extract oil out of their reserves.
Warmer revisions to the forecast for the weekend and next week are keeping a lid on the prompt.
The system is currently 1mcm long this morning with demand pegged at 182mcm, 11mcm below seasonal normal total demand.
LDZ consumption is 6mcm lower day on day whilst CCGT demand is slightly higher.
IUK exports are nominated at 16mcm, around 7mcm lower Day on Day.
Storage facilities are withdrawing 11mcm.
UKCS nominations are 128mcm and Langeled nominations are presently at 38mcm, in line with yesterday.
The Kristin outage is expected to last until 22nd, with a capacity loss of 8mcm.
Kvitebjorn is expected to last for 10 days until the 26th with a capacity loss of 14.7mcm and the Nyhamna outage has ended.
On renewables, solar output is forecasted to remain strong and above seasonal normal over the next couple of weeks.
Wind generation is down over the weekend but remains near seasonal normal levels for the next 2 weeks.