Market Report

This morning, prompt gas contracts are trading lower, as strong supply flows lead the intra-day system into oversupply. Total NBP supply is nominated at c.294mcm, with UKCS, NCS and LNG comprising the majority of flows at c.107mcm, c.95mcm and c.55mcm respectively. Demand is supported by high domestic heating usage, as temperatures fall short of seasonal normal. Meanwhile, exports to Belgium through the Interconnector have reduced, in response to recent system shortness.

Further out, gas contracts are trading higher, with sentiment coming from strengthening oil prices. Brent Crude trades at its highest level since November 2015, supported by a weak US Dollar and the American Petroleum Institute (API) reporting a 1.1 million barrel fall in US crude supplies in the previous week.

The UK power market is trading higher, in line with respective gas contracts. The wind forecast is reduced today and currently produces 2.1GW of power, whilst coal-fired generation has ramped up to 13% of the stack. Elsewhere, the reduction in service of the Aberthaw power station announced on Monday, continues to impact on the curve, with support provided by uncertainty in future supply capacity.

Today will be mostly sunny with scattered showers in the morning. Skies will cloud over for many of us by noon with widespread showers and some hail and sleet. Later much of the western half of the country will become dry and sunny. It will be another cold day with top temperatures near 11 Celsius.

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