The gas system in the UK opened “very short” while the power sytstem has been “slightly tighter” this morning.
That’s according to the latest market report from npower which suggests the short gas system has seen “prompt gas prices push higher”. The line pack is forecast to close around 17 million cubic meters “undersupplied” as Norwegian flows to the UK has reduced but continues to be high to mainland Europe.
“We’ve also seen Dutch flows ease from yesterday’s level and they’re likely to continue around this lower level for the rest of April as we generally see lower flows for the start of summer”, Client Portfolio Manager Gemma Bruce said.
However, Liquefied Natural Gas (LNG) send out has picked up this morning, “with nominations at around 30mcm – just ahead of the number of tankers that are due to arrive in the UK in the next couple of weeks”.
Looking at power, she added: “The power market has been slow to take off this morning with the front month the only contract transacted so far and this has seen a touch of support as the tightening fundamentals lend support there. We’re likely to see this sentiment filter throughout the rest of the curve as well even though activity has been limited so far this morning.”
Although the power margin is tighter, it is “comfortable” at around 13GW “and this is on the back of wind generation reducing to sub 1GW and also nuclear generation just contributing 15% to the total generation mix”, Ms Bruce said.
With the Hunterston power station coming offline unexpectedly last night and the planned maintenance at Dungeness power plant, nuclear generation has reduced by over 1GW from yesterday’s levels.
Brent oil has also “edged slightly lower today” to around $107 per barrel “as we saw some slightly worse than expected Chinese manufacturing data”.
European unemployment data is due out later today “which could see some movement in the Pound-Euro exchange rate and therefore this could lend some direction to the curve”, Ms Bruce added.