GAS MARKET UPDATE:
Seasonal gas and power contracts dropped to new lows this morning as falls in commodity markets weighed on prices. Summer 16 gas fell 1.33p/th to 29.70p/th, while summer 16 power slid £0.85/MWh to £33.50/MWh. Spot gas and power contracts also decreased. Day-ahead gas slipped 1.90p/th to 32.70p/th amid excess supplies,
The Day-ahead contract has softened considerably from its previous closing point, as a heavily oversupplied system has outweighed the bullish pressure of below seasonal temperatures expected for tomorrow. The substantial surplus has been created by a step up in Dutch imports via the BBL pipeline, coupled with a ramp up in Belgian exports to Britain via the IUK pipeline. LNG send-out from South Hook has also ticked up, ahead of LNG tankers arrival at the site on the 18th January.
In addition, Norwegian imports via the Langeled pipeline remain consistently strong at around 72mcm/day, while the Rough storage facility has continued to bolster the system with withdrawals.
The prevailing bearish sentiment on the prompt has made its way on to the front of the curve with relative ease, pressuring products below their previous settlement assessments.
Further along the curve, contracts have mirrored the direction of earlier dated products, although current strength on the crude oil market is attempting to offset the movement.
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