Cooler weather helped nudge prices higher
NBP Natural Gas & GB Power Market Movement
Forecasts for much cooler weather on the horizon at the beginning of the week was the main cause for prices rises. Home heating accounts for around 40% of the UK’s gas use and therefore cold weather can have a large impact on the UK market and price direction.
A weakening of the Sterling against the Euro following comments from Prime Minister Theresa May that Brexit would not involve holding onto ‘bits of membership’ also contributed.
There were some mitigating factors with increased Interconnection flows, particularly from the BBL gas line and the Belgian to UK interconnector. However, the step up in other supply sources to the UK was not enough to fend off price risk often associated with very cold weather.
By the end of the week, prices did ease back with milder weather expected over the weekend (14th to 15th January) and on the potential for a higher LNG send-out. Italy’s supply/demand balance also looked improved after a very tight market in Italy during the week which resulted in a rise in Italian imports of NW Europe gas. Coal concluded the week up more than 7% and Oil closed the week lower by just below 3%.
Download Full Report For This Weeks Outlook...