Small Business Energy Market Update
Tuesday 29 May 2018
What has happened to Gas prices this week?
UK Gas prices lifted at first during the past week, but some weakness on Thursday/ Friday in time for the Bank Holiday weekend helped to pressure gas prices.
Oil prices continued to rally at the start of the week, fuelled by the European maintenance period taking place. Planned outages were revised, meaning extensions were placed on a number of key pipelines.
Coal prices continued to strengthen with the Rotterdam Coal price trading up at $88.10, which continued to offer support to the UK gas price.
Carbon prices continued to strengthen, with Carbon futures trading over €16 helping to push up the price on the back of the curve.
On Thursday, news broke that Russia were to boost Oil output to compensate for the reduced output from Venezuela and Iran, both of which have been slapped with sanctions by the US. Oil prices were close to breaking the $80 mark, the highest price in 4 years before prices tumbled at the end of last week. Prices remain low and in turn, have pulled UK gas prices down with it.
The UK experienced a week of significantly warmer weather, above seasonal normal, reducing the gas demand and heating consumption. The weaker gas demand ensured that total UK gas consumption was below seasonal norm all week. This helped to keep the UK system in good shape, with ample supply at the front of the curve.
What specifically affected prices in the past week?
Bullish factors (upward pressure)
- Coal Prices strengthen
- Carbon Emissions Climb
- European Gas Maintenance
Bearish factors (downward pressure)
- Warm Weather
- Low Gas Demand
- Oil Prices Down