The gas system in the UK moved “short” this morning, with the amount held in the system expected to drop by around 3% today.
According to the Daily Market Report from npower, the main driver for that was a “pick-up in demand and reduced flows from the Netherlands”.
Client Portfolio Manager Tom Matthews added: “Also, further out on the curve we’re seeing continuous strength on oil, carbon and the euro today. We had slightly disappointing data out of the UK around services and that’s given a touch of support to the Euro and contracts are slightly trading at a premium further out.”
Support will however be capped by the news of two Liquefied Natural Gas (LNG) tankers due into the UK in the next two weeks, he said.
Mr Matthews suggests keeping an eye on the gas system as usual. He said: “Yesterday we saw the gas system move short after it was long in the morning and that gave support to contracts. So similarly if we see some developments later on, we do expect that to give some sort of driver to contracts across the curve.
“On top of this the new Federal Reserve Chairman in the US Janet Yellen is to give her first public announcement later around 3pm so this may well give a strong driver to oil.”