Gas prices for the coming days rise again

Forecast cooler weather for the beginning of April saw gas prices for the coming days rise again yesterday. The spot price eased marginally but day ahead was up by 1.80p as demand is expected to increase with wind generation falling further. The new front month contract for May gained 0.86p and Q3 was up by 0.58p but movement further out the curve was marginal.  

The market remained bearish in light of new restrictions

Crude oil prices fell for a second consecutive day on Wednesday with Brent crude shedding 60 cents to settle at $63.54 and NYMEX crude shedding $1.40 to settle at $59.16 a barrel. The losses were readily associated with increasing Covid infection rates in Europe and elsewhere, which have led to fresh restrictions. The greater loss in the U.S. benchmark, West Texas Intermediate, were more difficult to reconcile with easing of restrictions in many parts of the States and a bullish weekly inventory report which showed a big draw on gasoline and distillate stocks last week, even as refining activity increased ahead of the Easter holiday and the summer driving season.

 Forecast deliveries are running short of demand this morning

With demand on the UK gas system  falling as we head into the holiday weekend, we might have expected to see prompt gas prices easing. Such is not the case this morning however as forecast deliveries are running short of demand this morning. Reduced LNG send-out is the primary cause of the system shortfall but there are signs of this situation improving. Within day gas is up almost 3.00p on last night’s close while the day ahead contract has gained 0.85p. Gas futures are slow to trade with the front month contract for May one of the few showing any transactions but little movement. Crude oil has recovered   some of yesterday’s loss as the market awaits news from the OPEC meeting today.