The UK saw “strong withdrawal” from gas storage facilities last week due to the fall in temperatures – leaving them only 27% full.
The statistics from npower’s weekly market report is in contrast to storage being 43% full at the same time last year. However, Magali Hodgson (pictured), Optimisation Desk Manager at the energy firm said there were “strong gains” for UK power and gas contracts last week.
On the oil side, brent oil was weak, moving from above $117/bbl (£77.3) to below $115/bbl (£76). The increased stock of crude oil and questions around “US monetary policy” is believed to have caused the price to drop.
Looking ahead, Magali suggests there will still be some uncertainty around gas flow in the UK.
She said: “Our storage is only 27% full, this time last year it was actually at 43%. To add to that situation, there are no LNG tankers on the horizon. However, the cold temperature is set to be relieved around mid-week so if we have warm temperature we should be fine. However, any cold snap by the end of this winter could mean that the gas system will struggle and will be a challenge to actually balance itself.”
She suggests looking at carbon as it will still be a driver for prices and also keeping an eye on the pound to euro fluctuation.
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