UK gas system ‘short’ this morning

The gas system in the UK “opened undersupplied” this morning, with the link pack forecast to close around 14 million cubic meters short, according to the daily market report from […]

Register now!

By Priyanka Shrestha

The gas system in the UK “opened undersupplied” this morning, with the link pack forecast to close around 14 million cubic meters short, according to the daily market report from npower.

“This has done little to support prices with the near curve gas pushing lower once again after reaching two and a half year lows yesterday”, Client Portfolio Manager Gemma Bruce (pictured) said.

Demand has “increased slightly” compared to yesterday’s levels but it remains “much below” seasonal normal levels, she added.

Flows from Norway into the UK “remain unchanged” as production is lower and Europe continues to get higher flows.

The power system has a “comfortable” peak margin of over 15GW this morning. The French interconnector has returned to full capacity and is currently importing 2GW to the UK and wind generation is also “fairly healthy” at around 2.5GW this morning.

 

“The front month power contract has opened slightly lower this morning with the rest of the curve looking set to open roughly flat. However we could see some pressure on the longer dated contracts as Brent oil has dipped below $105 per barrel this morning. This is on the news that the Libyan Government is approaching a deal with the rebel protesters there. So we could see output from Libya increase in the near future”, Ms Bruce said.

She suggests keeping an eye out for US unemployment data due to be released later today “as this could see some movements in currency and therefore lend direction to the curve”.

“Also watch out for increased activity in the trading windows between 10.30am-11.30am this morning and also between 3.30pm-4.30pm this afternoon as part of secure and promote”, she adds.