There is uncertainty in the gas market this week, according to Inenco’s Y report.
The news comes as the Dutch Government announced it would cut gas production at the Groningen gas field earlier this week.
Dorian Lucas, Energy Analyst said: “There is a lot of speculation in the market whether the cap is going to be decreased or increased, however the prevailing view at the moment is that the cap is going to be decreased and potentially see less supply across Europe and in the UK during winter.”
Short term contracts traded higher this week as a result of the speculation in the gas cap announcement and it has impacted BBL pipeline flows between the Netherlands and the UK as well, he added.
“Seasonal contracts have traded higher and that uncertainty over winter supply and the potential for us to get less than we originally thought has put a lot of pressure”, said Mr Lucas.
The Greek debt crisis is another factor, Mr Lucas said: “Earlier in the week there was a lot of uncertainty whether the Greek economic policies would warrant getting financial support from the euro zone.”
Fixed priced and flex contracts should hold “this week and wait for a market correction”, according to Mr Lucas.