News Blog

20 Dec 2016 | Filed under: Energy Reports

Weekly Energy Report – Week Ended 15 December 2016

Summary

The week ended slightly up across the whole curve though several factors competed for domination.

Gas and Power

Prices were up across the board to start with. In the short term, a shortage of supply in the gas system and further out, prices responded to the increase in the price of oil futures after further agreements to cap oil production by non OPEC countries.

As the week progressed, a strong Pound and an over-supply of gas due to high imports from Norway and lower demand due to warmer temperatures helped stem the increases. In the short term this was offset by lower than average seasonal wind output.

As the week came to a close, oil prices softened on the back of a strong Dollar and confidence in the available margin helped keep prices stable, though next week temperatures are expected to return to seasonal average or below.

Outlook

The new week has started up as oil prices recover. Mixed reports on gas availability are creating some confusion as anticipated colder weather may not now arrive and there are conflicting reports about the Rough storage facility maintenance issues.

As we enter the festive season we might hope for an unexciting market as traders pack up their bags.

Further out on the curve, oil and currency rates must remain key drivers. Despite the oil price having a somewhat unpredictable effect on prices, the caps on output agreed recently have not yet been delivered. Assuming they are, then the relationship between demand and supply should start to have an impact on top of what the traders are speculating on.

For further information, please contact Ravi Khakhria – ravi.khakhria@auditel.co.uk / 020 8866 6551

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