Archived Summaries

Friday 10 August 2012
Market Opening
This morning the UK gas system has opened in balance this morning with forecast demand at just 164 MCM. The supply side has adjusted with total Norwegian deliveries down to just 30 MCM and LNG send-out at 45 MCM this morning.  The slump in demand which is primarily down to low gas-fired power generation and industrial demand, is compounded by falling commercial demand heading into the weekend and unusually low domestic demand as temperatures across the UK and Ireland move above seasonal norms.  Prompt gas prices have gained slightly in early trading but futures contracts are trading lower as crude oil prices retreat from yesterday's 3 month high of over $113 per barrel.  Brent crude has fallen by a dollar while West Texas Intermediate is down by 85 cents, reducing the differential between the 2 benchmarks crudes which had threatened to exceed $20 per barrel yesterday.  The first tropical storm of the current season looks like hitting the Gulf of Mexico over the coming days and this may cause the differential between WTI and Brent prices to close a little as the NYMEX benchmark is more likely to move upwards as a result of any damage to production facilities.