Energy Market Report September 2017
UK gas prices continued to climb during August, with front month September closing up 15% from where it entered the month.
Similarly front quarter Q-4 and front season Winter-17 gained 9% and 8% respectively as the market dealt with a series of unplanned outages in Norway, which affected flows into both the UK and Europe.
LNG deliveries to the UK and Northwest Europe continued to be low, making traders cautious about the winter outlook, as UK gas storage levels remain low.
Hurricane Harvey in particular struck the southern USA hard, causing a spike in gasoline prices but a drop in Brent oil prices, as refineries were shut.
The hurricane also appeared to cause a shutdown in LNG production in the USA, affecting global cargoes.
The first part of September continued in a similar vein, though prices have reversed since mid-month, as fundamentals soften slightly.
Norwegian production is coming toward the end of its outage window, Sterling has strengthened and the short term temperature outlook has warmed.
That said, LNG deliveries remain slow, while Asian LNG prices have jumped, while UK gas storage remains low.
The spectre of potential disruption to French nuclear powergen hangs over the market, though the impact at this stage is not expected to be as severe as last winter.
ICE, Bloomberg, Reuters, WSI