Daily Market Report Thursday 11th January 2018
Weather runs published this morning have turned colder and below seasonal norms moving into week 3 for the UK and into Continental Europe.
However, immediate temperatures are at seasonal norms with LDZ demand has reduced by 24mcm since Monday.
The current weather pattern experienced in the UK is bringing low wind levels and CCGT sites are having to make up the deficit however the NBP has opened 20mcm long so it can cope with the increased demand.
The length in today’s system is attributed to slightly higher UKCS production whilst IUK and BBL imports remain strong as their respective basis spreads remain wide to support their current nominations.
MRS sites are nominated to export 16mcm to the NBP today however they are only flowing 9mcm due to the aforementioned system length.
NBP and continental contracts are still feeling impact of an expected reduction at the Groningen field due to earthquakes in the region, and the Dutch state regulator will be responding today to a proposal that production at the site should be lowered this is widely expected to be around 11am today.
The bulls are still supporting prices from all along the forward curve, the rise in contracts were compounded further by Brent crude reaching nearly $70/bbl and 3 year highs and gains in the wider commodity complex.