Gas flows reduced – Y Report

The gas market has seen reduced flows from the UK Continental Shelf this week due to a number of planned maintenance, according to Inenco’s Y Report. Send-out from the Dragon LNG terminal […]

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By Jonny Bairstow

The gas market has seen reduced flows from the UK Continental Shelf this week due to a number of planned maintenance, according to Inenco’s Y Report.

Send-out from the Dragon LNG terminal is expected to decline following the arrival of a cargo earlier this week.

A rise in Local Distribution Zone gas demand is expected due to temperatures falling back towards the seasonal norm and increasing heating demand.

Power market prices have been relatively volatile due to tighter supply margins, said Energy Trader Rebecca Hermolle. This is due to subdued renewable generation, a number of nuclear outages and higher consumption as a result of warmer temperatures last week.

 

Prompt power prices rose to a 10-year high last week, reaching £160/MWh. Prices this week have opened above £100/MWh due to a tight supply of margins mentioned earlier.

Prompt gas prices didn’t rise as significantly last week but did move away from the recent seven-year low.

Ms Hermolle added: “With seasonal contracts, they followed the prompt power market higher but obviously not as significantly as the prompt market. They did move away from the multi-month lows hit earlier this month.

“You could look to take advantage of losses we have seen since the start of Q3 2016 as the downside potential is significantly outweighed by the upside risk, particularly moving into winter, when the supply and demand fundamentals are expected to be extremely uncertain and volatile.”