Small Business Energy Market Update Tuesday 15 Jan 19
What has happened to Gas prices this week?
The UK market has generally fallen in market value since the turn of the New Year, but this has not been without volatile days.
Warmer weather forecasts and mild out turn has kept gas demand below seasonal norms for the majority of the year so far. The UK has a healthy supply outlook currently with the UK system opening and remaining long for the best part. Last week the UK system opened with 56mcm and 32mcm oversupplied. The UK has experienced extremely strong flows from Norway and LNG cargoes continue to flock to the UK with all of Britain’s terminals receiving a delivery last week.
There have been days below seasonal norm, and as expected at this time of year, the weather plays a volatile role on the front of the curve. When expectations raised about a Stratospheric Warming Event (The weather pattern that brought the Beast from the East) the market lifted significantly.
Late last week saw the market lift slightly as it was announced that there would be maintenance on fields that deliver from Norway into the UK from 3rd to the 8th February. The restriction is only small, however it coincides with dates in which Europe is expected to feel the cold and has lifted the demand on these dates in response to this.
Oil prices have lifted since the turn of the New Year, climbing to highs of $62/bbl. Reports emerged that Saudi Arabia production was down and the US and China were locked in talks last week trying to end the trade war that saw both countries slap import tariffs on each other’s goods. The resolution to this spat is expected to lift the global demand for Oil, which has had a bullish nature on the market. Prices have eased back in the last couple of days.
Temperatures are set to be above seasonal norm for the most of the working week, before turning cooler into the weekend. Despite the cold, this has seen prices fall as the minimum temperatures are expected to deliver 3/4°C above the temperatures that were forecast last week which will mean UK demand will not lift as much as originally thought last week.
Small Business Energy Market Update Tuesday 15 Jan 19 – Outlook
What specifically affected prices in the past week?
Bullish factors (upward pressure)
- Colder Weather Forecasts
- Outage (Fields delivering from Norway to UK)
- Oil Prices are up
- Coal & Carbon are strong
Bearish factors (downward pressure)
- Warmer weather delivery
- Healthy Gas supply into the UK
- Good LNG picture and strong flows
- Demand below seasonal normal
- Storage Levels are full
Small Business Energy Market Update Tuesday 15 Jan 19 brought to you by British Utilities