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.