Several planned and unplanned issues were announced which raised concerns over tight summer supplies. Reduced Norwegian production would limit the availability of excess gas for storage injections. Total European storage reserves need to inject around 60bcm of gas to rebuild for next winter. If reserves are unable to be fully replenished this could cause supply problems, with storage stocks at five-year lows.
Field maintenance was announced, cutting 20mcm of production per day until 1 October (around 8% of total output). Summer gas prices hit new highs not seen since December 2014. However, the work was swiftly cancelled and prices reversed some of those gains.
Current gas demand remains low, cut particularly last week by a spell of unseasonably mild temperatures. However, supply levels have fallen in line with lower summer consumption.
The UK has continued to export gas over the Interconnector.
Longer-dated gas contracts also drew support from further rises in crude oil, with Brent hitting new highs from 2014 at $74/bbl.
Balance of Summer power contracts moved up last week, drawing support from higher gas prices, linked to storage reserves and Norwegian maintenance work. However, longer-dated contracts were little changed, with annual prices consolidating around the multi-year highs hit earlier in April.
Recent strength in gas, coal, oil and carbon has been price supportive, raising the costs of generation. Electricity demand has fallen sharply so far this month, with warmer weather and lighter evenings reducing consumption. High levels of solar availability, particularly last week, has also cut demand for the transmission network.
The UK set a record for consecutive hours of coal-free generation, with the grid running for over 54 hours without use of coal. Day-ahead prices have continued to hover around £50/MWh, fluctuating in line with wind levels.