Daily Energy Market Report Monday 7th Jan 19. The UK has opened with gas prices significantly lower than the close on Friday, with prompt prices shedding huge value to start the week.
The UK has opened the week with an exceptionally long system, at 56.7mcm long.
The UK has turned milder in comparison with last week reducing the gas demand, with flows remaining strong.
Gas demand for power has fallen to 52mcm due to higher wind levels and total demand is set to be 15mcm below seasonal norm.
Weather models were pointing towards a Sudden Stratospheric Warming event, a weather phenomenon that led to the Beast from the East in March 2018, hitting towards the end of January which was ensuring that front month contracts were holding on to some risk.
This morning this seems to have disappeared with the chances of this reduced massively in the UK.
Temperatures are set to remain at seasonal norm as minimum until the end of January.
WD contracts lost 8p/therm from Friday’s trading upon open today.
Brent Crude prices have lifted considerably over the weekend and this morning, but have failed to add any significant weight on the curve.
Brent is up just under $3 compared with Friday at $58.21 as reports emerged stating that OPEC led production cuts had removed ~460,000 barrels a day from global supply.
The US and China are set for face to face talks today, where it is expected that a resolution will be agreed to halt the trade war which has seen both countries slap tariffs on imports/ export goods.
This will lead to an increased global demand.
The Brexit vote is set to take place at some point next week, and the GBP has strengthened this morning ahead of the UK parliament returning to Westminster this morning.
A story worth watching!
Daily Energy Market Report Monday 7th Jan 19 brought to you by British Utilities