Small Business Market Update Tues 12 March 19.
What has happened to Gas prices this week?
UK prices remained relatively stable through the previous week, favouring the downside if anything as the supply picture continues to drive the gas market in the UK.
The UK continued to see solid LNG supply into the grid keeping the system well balanced during a period of increased demand as temperatures returned back to seasonal norms. Weather models that were revised earlier in the week were favouring cooler conditions helping to withhold some cold weather premium in the market.
On Thursday, it was announced that a gas field in Norway, Sleipner, would be offline until the weekend, taking capacity offline. Flows from Norway into the UK reduced for the week, falling from 70mcm on Tuesday to just 47mcm by the end of week.
The maintenance period announced at Sleipner had a short impact on the market as Storm Freya moved through the region bringing with it strong winds helping the renewable generation for the country. The UK grid saw gas burn for electricity demand fall to below 50mcm and touched as low as 38mcm, meaning gas burn accounted for less than 14% on Friday.
Despite Carbon prices rising in recent weeks, it was a bearish week across the energy complex with Coal and Carbon posting losses helping to ease pressure on the far end of the curve. Only Oil, which has started to have less of an impact on the gas curve posted some gains as Saudi Arabia remain committed to restricting production.
Brexit is set to take a front seat in the key drivers of the market this week as the House of Commons are set to vote on Theresa May’s second Brexit Deal on Tuesday 12 March, before further votes set to happen through the week if they are not passed. We have already seen GBP drop from 1.17 to 1.1550 and back to 1.1650 within day today ahead of the vote.
Small Business Market Update Tues 12 March 19 – Outlook
What specifically affected prices in the past week?
Bullish factors (upward pressure)
- Carbon Emissions Climb
- European Gas Maintenance
- Cooler weather
Bearish factors (downward pressure)
- Lower Gas Demand
- High Renewable Generation (Storm Freya)
- Bearish Energy complex
Small Business Market Update Tues 12 March 19 brought to you by British Utilities