Short-term gas prices in the UK – despite a brief rally over Christmas following a flurry of outages – have remained largely bearish since mid-December amid sustained low temperatures and a lull in demand.
Day-ahead gas prices fell by 9.5% in the second half of December as mild weather and low holiday demand failed to stir much buying interest. Daily consumption levels lagged beneath seasonal norms by between 7% and 27%.
Unseasonably warm weather in mainland Europe too also meant further Norwegian and Dutch supplies were diverted to the (higher-priced) UK market. Norwegian gas exports surged at the end of the month to their highest level of the year – of 330 mcm/d – with flows to the UK increasing the most, to 128 mcm/d.
Prices did briefly rebound either side of Christmas when unplanned outages hit both the Barrow gas terminal and the Dutch interconnector overnight.
Nevertheless, the outages (and gains) were short-lived and prices turned to the downside again, throwing a bearish pall across the coming months.
In electricity, the April Annual ’14 UK power shed more than £1, while future Annuals also edged lower, but by smaller amounts, having ramped gently higher in the run-up to Christmas.
Coal prices have also dropped back to early December levels, on renewed expectations that Colombian exports will continue uninterrupted this month despite the introduction of tighter loading rules.