Weekly Price Update Report - Week 37
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Energy Market ReportsWeekly Price Update Report - Week 37

Weekly Price Update Report - Week 37

Jamie Flanagan

by Jamie Flanagan 11 September 2017

Report Summary:

Supply fundamentals return


NBP Natural Gas & GB Power Market Movement

UK energy prices rose on Monday despite oversupply and a reduction in UK gas to the continent.  Reduced Norwegian gas deliveries, a firmer Euro to GP Pound rate along with support from the coal market were the main bullish drivers of the day.  Prices gained further on Tuesday, directed higher by a pick-up in UK gas exports and a continued reduced LNG send-out level. Prices within the wider fuel spectrum such as oil, carbon and coal also gained during the day. Despite oversupply and improved Norwegian gas deliveries to the UK, prices closed higher mid-week due to an unplanned outage at the Laggan Tormore fiel and once again, price rises in the coal, carbon and oil markets filtered through.  A tighter supply outlook meant that the upward trajectory in prices continued on Thursday with average temperatures expected to dip from September 15th  to lows of 10.5 degrees.

The Aldbrough mid-range gas storage facility experienced a full outage also.  Overall by Friday, annual energy products rose week-on-week with the October-17 annual electricity and gas contracts closing higher by 2.58% and 3.52% respectively.Markets rose on Tuesday on higher domestic demand and Norwegian maintenance being extended.  Further bullishness spilled into Wednesday thanks to an undersupplied gas network but rises were capped following an announcement from Total that it had started production, earlier than scheduled, at two new gas fields.  Although production is unlikely to ramp up until the back end of this year, the earlier than scheduled start of production does help towards containing some of the winter supply risk (often associated with the higher winter periods of December and January).

The markets opened lower on Thursday but another unplanned outage impacted UK supplies that day.   There were sharp rises in the oil price, particularly at the end of the week with a reduction in the US oil rig count. Limiting gains in this commodity was the restart of some US operations after Hurricane Harvey.  Further restarts are also expected in week commencing 4th September or week 37.  Overall by Friday, annual energy products fell week-on-week with the October-17 annual electricity and gas contracts closing lower by 0.11% and 0.27% respectively.

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