The gas market opened strong this morning, taking its lead from gains in oil and a weaker pound.
The power market has been slow to get going but npower’s daily market report suggests it will be another bullish day.
The gas system is undersupplied with the linepack expected to close nearly 9mcm short.
An unplanned outage at the Kollsnes gas processing plant is affecting flows through the Langeled pipeline, which is currently flowing at 45mcm. Withdrawals from storage is covering some of the shortfall.
Next week’s temperatures are forecast to dip below seasonal normal levels and is likely to increase demand as people turn on their heating.
With gas-fired generation making up a significant portion of the stack, this increase could see price support continuing into next week.
Gemma Bruce from the Optimisation Desk said: “The bullish sentiment remains in the oil market, driven by the OPEC production freeze agreement and reduced US stockpiles. Oil has pushed up and is now trading at $52.79/bbl (£42.72/bbl).
“The pound unexpectedly dropped to new lows of €1.09 in the early hours of the morning, it has since recovered but the reason for the sharp dip is yet to be discovered. The pound is now trading at €1.12 with market apprehension over a hard Brexit driving sentiment.”