Daily Energy Market Report Wed 3rd Oct 18
The NBP has picked up where it left off yesterday opening in line with yesterdays close but has since strengthened.
The system is 9.3mcm short today with the supply picture looking similar to yesterday.
UKCS is nominating at 80.5mcm with Langeled at 44.9mcm.
LNG send out is 8.3mcm.
Day on day changes lie on the demand side with gas for power demand ticking up to 45.5mcm, a 10.5mcm increase day on day and we are injecting into storage at an increased rate of 21.2mcm.
LDZ demand is in line with yesterday at 100.2mcm.
Similar to yesterday, no major changes in the weather models this morning.
In the near term, it is still looking cooler this weekend and into Monday with next week’s outlook still mild and breezy with temperatures 3C above seasonal normal.
Importantly, there is no sign of any significant cold in the next 2 weeks, which limits the risk of any upside movement of the prompt.
The Euro has also strengthened against GBP on easing fears around Italian debt.
A local newspaper reported that Italy would decrease its budget deficit to 2%, as opposed to 2.4%, of GDP by 2020.
Brent has held its value overnight with it currently priced around the $85/bbl. mark.
Expectations of tighter supply once US sanctions on Iran start are driving the market upwards, however a strong dollar and rising US supply are keeping the gains in check.
A strong dollar discourages the buying of oil, as it is more expensive for other countries to import US oil.
LNG cargoes have been hard to come by for the UK with South Hook receiving zero cargoes and Grain receiving four cargoes in the month of September.
However, two vessels are expected to berth at South Hook between the 13th and 15th of October.
Dragon was nominating at 8mcm yesterday in expectation for the arrival of one of these cargoes with LNG send out in the UK system flowing at 8.3mcm today.
Daily Energy Market Report Wed 3rd Oct 18 by British Utilities