Weekly Market Update for 3 January 2018

Weekly Market Update for 3 January 2018

Wholesale gas prices had a mixed festive period. Losses were recorded week-on-week for the contracts delivering gas between now and the end of the winter, while the movement further forward occurred after the problems on the Forties pipeline.

Forties’ operator, Ineos, had called Force Majeure on the UK’s main oil pipeline, ceasing operations when hairline cracks were discovered. However, just before Christmas, Ineos indicated full, normal operations would return in January. Meanwhile, the gas supply system coped with a cold snap with minimal issues, and has gone into 2018 with stronger Medium-Range Storage (MRS) stocks as a result of injections over Christmas.

Week-on-week price movements in the electricity market echoed gas prices over the festive period. Losses close to delivery reflect weak Christmas demand, a healthy supply system, and the expected return of the Forties pipeline this month. Expectations of a mild January were also a factor behind the losses for the balance-of-winter contracts. Meanwhile, there has not been much change in longer-dated contracts, again mirroring the gas market.

There has been little change in expected long-term fundamentals to trigger any major shift in prices beyond the current winter.

Market Update 2.1.18

Ross Moffat

Posted by on Wednesday, the 3. January at 11.21

Ross Moffat has been a part of the Market Intelligence team at Utilitywise since early 2014. His responsibilities include delivering Market Intelligence reports to clients and managing the Utility Insights Twitter account. Ross has a first class Honours degree in Business and Marketing from the University of Stirling.