Gas system oversupplied – DMR

The UK gas system is well oversupplied at 50mcm long, according to npower’s daily market report. Power contracts are slow to get trading and gas contracts are soft. Outages ending […]

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By Jonny Bairstow

The UK gas system is well oversupplied at 50mcm long, according to npower’s daily market report.

Power contracts are slow to get trading and gas contracts are soft.

Outages ending see Langeled nominating close to 40mcm today, with South Hook at 44mcm.

Demand through the IUK interconnector is strong at 56mcm but this is still doing little to soak up oversupply.

Peak power margins are tighter today at around 9GW, with wind generating around 4GW of the stack.

 

Oil prices have fallen to $47.53/bbl (£35.86/bbl) following an increase in drilling from US producers, adding to the supply glut.

Sam Hill from the Optimisation Desk said: “Doubt has also grown in the market fuelling any bearish sentiment as the length of the OPEC talks leads some to believe a cap on production may just be a pipe dream.

“The pound is currently valued against the euro at €1.17, weakness is driven by the British Chamber of Commerce drastically cutting growth forecasts in the wake of the Brexit vote.

“Tomorrow we have a run of CPI, PPI and RPI data which is likely to affect direction and later today CB lending index data may affect the value of the pound.”