This morning
UK gas demand has reduced slightly overnight but nevertheless remains above the 400 MCM mark and is also well ahead of the seasonal norm by 81 MCM. Demand for this morning in the UK is pushing 408 MCM while supplies are coming in at 393 MCM leaving the system short by just 9 MCM. While temperatures remain low it can be expected that heating demand will remain high and put some pressure on the system. That said however the flows from Langeled remain impressive with flows coming in above 70 MCM. Gas prices remain high this morning and it is clear that much of the impetus on the market is spot led as day ahead and within day prices surge ahead. The within day contract on the prompt is trading at 75.00p, up by 8.5p from last night's close and a whopping 15.60p for the last two days. Likewise day ahead gas is priced at 75.00p although the bid offer spread of 69.00p/77.00p would suggest that the market is unsure of the value of this gas. Likewise gas for next week is trading at a discount of 3.40p from the day ahead contract. Much of the price pressure on the futures market is at the front of the curve with prices up by 1.50p while longer term contracts are up by between 0.80p and 0.50p.
Thursday
The icy grip of Siberian winds continued to dominate over much of Europe on Thursday. Temperatures reached new lows for this current winter and as a result gas demand over the UK reached the highest level for the year so far. Despite some early problems with their website, National Grid announced a forecast demand for Thursday of 412 MCM. The supply side opened well in advance of this and the system was comfortable early on with a surplus of 15 MCM. As is nearly always the case in high demand scenarios, prices moved up sharply on the day with considerable pressure on the spot. The within day contact peaked at 68.60p but eased off towards the close to settle at 66.50p, up by 7.10p. Likewise day ahead gas topped 70.75p before settling at 68.75p. On the curve the price pressure from the prompt saw March move up by 1.48p. The Summer 2012 contract resisted much of the weather related premium and finished at 56.62p. U.S. and European crude went in opposite directions with gains on Brent coming in at $0.51 a barrel.

This morning
A problem with the UK National Grid website this morning has left the market in the dark regarding the supply demand situation. With temperatures falling lower and demand undoubtedly higher, traders are assuming a negative supply-demand balance and the spot price has spiked at 65.00p. Within day is still trading at 2.00p above yesterday's closing day ahead price and prompt prices generally are up by between 3.35 and 5.25p. The lack of information on the current state of the supply system is adding to the bullish mood on the market where continental buyers are again looking to secure additional supplies via the interconnector which is nominated to export almost 30MCM today. Futures prices have opened higher this morning also, with the front month up by 1.45p and contracts for Q2 and the summer gaining between 1.00 and 1.50p. The winter 2012 contract has gained just under a penny with the market supported by increased optimism for euro-zone debt resolution and strengthening oil prices while Standard and Poors issued a statement projecting an end to the euro-zone recession in late 2012. Brent crude has gained 50 cents overnight as the dollar weakens against most major currencies. Movement against the euro was minimal however, the euro is worth 1.314 dollars this morning. 
Wednesday
Demand on the UK gas system hit a new high 0f 385MCM for the current winter on Wednesday. While this was 50MCM above the seasonal norm but the system remained comfortably supplied on the day. Forecast deliveries ran 20 to 25 MCM ahead of demand throughout the day and within day prices were restrained as a result, finishing 0.50p lower than on Tuesday. There was no such restraining influence on day ahead and the remaining prompt contracts however, as forecast lower temperatures for the UK and higher export nominations, drove prices sharply higher. Contracts for the next few days finished in a range from 60.00 to 63.00p. The day ahead price for today was up by 2.50p and the weekend by 2.00p as severe weather spread across central Europe and with Russia struggling to meet increased demand, the Bacton-Zeebrugge interconnector went into export mode for the first time this week. The futures market recorded solid gains across the board, recovering around half of Tuesday's losses in the process. Gains on the gas futures market were uniform along the curve, supported by stronger oil prices as European markets generally rallied pushing crude 58 cents higher.  

This morning
UK gas futures prices have bounced a little through early trading today with prices for the two front months up by 0.55p and 0.59p respectively while the two front Seasons have increased by 0.35p and 0.40p against yesterday's close.  Forecast demand for today has stepped up to 381 MCM.  At 49 MCM or 15% above Seasonal norms, this is the highest level seen so far this Winter.  Nonetheless, the system remains well supplied this morning, with forecast supply at 407 MCM and instantaneous flows at 376 MCM.  Langeled deliveries are currently robust, at 67 MCM and LNG supplies are also making a strong contribution with total send-out running at 70 MCM.  With Quarter 2 gas discounted by just over 5.00p against the within day price of 60.60p, Rough storage is operating at just below full tilt, delivering 44 MCM.  On crude oil markets, prices have increased through overnight Asian trading with Brent crude for March delivery last trading at $111.78, up 80 cents a barrel on yesterday's close while the equivalent Nymex contract is up by 70 cents a barrel at $99.18.  While the release of stronger than expected manufacturing data from China is providing a degree of support to prices at present, the release of U.S. oil stock data will likely become the dominant driver later today.  
Tuesday
While gas prompt prices remained at the upper end of their recent traded levels yesterday, the futures market continued to retrace the sharp increases posted through Friday and Monday morning.  The decline in prices had already commenced on Monday afternoon and this downward trend in prices remained well intact through Tuesday with the front two months falling by 1.69p and 1.49p while the front two Seasons fell by  1.39p and 0.89p respectively.  Demand on the day ran at 358 MCM, 26 MCM or 7 % above Seasonal norms.  Although this is well above recent demand levels which had hovered around the 300 MCM mark, it still represents a relatively benign demand for a Winter period.  In contrast, the single highest demand day of last Winter occurred on 20 December 2010 when demand reached 468 MCM, while demand for January 2010 and January 2011 averaged 397 MCM and 356 MCM respectively.  On crude oil markets, prices traded up by $1.50 to $2.00 a barrel for most of the day before closing the day just 23 cents higher after a rebound for the dollar forced a retracement of the earlier gains.

This morning
The UK gas market has opened lower this morning with most contracts traded so far down by 0.40 to 1.00p. The exceptions are the within day and day ahead contracts which are up by 1.70 and 0.70p as the system is running a deficit at this early stage. Forecast demand has risen to 360MCM and forecast deliveries are running 9MCM short at 0900. The reversal of the price rally of the past 2 days is not surprising - even with increasing demand - when we consider that at 360MCM, current demand levels are 100MCM below levels reached on several days in January 2011. When we consider also that storage levels this time last year were running at around 38% capacity, compared to 74% currently, the reality is that the UK system is in good shape and there is no fundamental reason why current prompt prices should be higher than they were last January during a particularly severe winter. Unfounded rumours of possible disruption to Rough storage withdrawals due to maintenance do not help and it may take a more critical test of UK supply capacity to reassure the market and allow prices to re-adjust. Progress on the EU fiscal pact and permanent bailout fund have lifted European markets this morning and oil is trading almost a dollar higher with Brent crude at $111.60 at 0900.  
Monday
As the long threatened cold weather finally hit the UK over the weekend, demand on the UK gas system jumped to 20MCM above the seasonal norm on Monday. The system remained well supplied however, with demand at 354MCM and forecast deliveries of 367MCM in the morning, the surplus gradually falling off to leave the system balanced at the close of business. The market seemed unconcerned with system fundamentals however as prompt prices moved sharply upwards at market opening, falling back somewhat by mid-morning, but rising again to finish at 60.00 to 61.00p across-the-board. While the colder weather was primarily responsible for the increases in prompt prices, there was also an element of distress purchasing evident, particularly on the February contract which expired yesterday having gained a total of 5.50p in heavy trading on Friday and Monday. The February contract hit an intra-day high of 60.75p but later eased to close at 59.38p. Contracts for the summer months and the front winter also recorded significant intra-day gains before settling 0.75 to 1.30p up on Friday’s closing levels. Oil prices eased a little with Brent falling 71 cents.

This morning
With long threatened colder weather finally hitting the UK over the weekend, demand in the UK gas system remained in or around the seasonal norm and has jumped to 20MCM above the norm this morning. While the system remained well supplied over the weekend, there is a forecast surplus today with demand at 354MCM and forecast deliveries of 367MCM while physical deliveries were running at 377MCM. Despite the healthy supply situation, prompt prices were up sharply at opening this morning but have since declined from earlier highs of over 60.00p. Within day and day ahead prices are up 2.00p but all prompt prices are back below the 60.00p mark. The futures market has seen a lively start to the week with the February contract trading up to 60.25p at opening but now back to 59.60p on its final day of trading. The incoming front month March, is trading 2.00p higher at 58.40p and the front summer is up 1.52p at 57.30p but the winter 2012 contract is trading 1.90p higher at just over 70.00p as price triggers continue to propel forward buying. Oil prices are down again this morning despite the ongoing threat and counter-threat concerning Iranian oil exports. Brent crude is 50 cents lower at $110.98.
 Friday
Thursdays reversal of the recent trend on the UK gas market proved to be short lived as prices turned sharply upwards again on Friday. A combination of forecast colder weather and news of a two-week shutdown of rough storage in February had traders scurrying to close out positions for February and March. The buying spree spanned both the prompt and futures markets resulting in strong gains on contracts across the board. The front month gained just over 3.00p and futures contracts out to summer 2013 were up by between 2 and 3 pence. Increases on the prompt market were even more significant. Following an opening position 1.50p up on Thursday's close, within day gaining 3.45p and the weekend 3.95p, while the day ahead price for today was up by 4.60p. The system coped reasonably well with the increased demand at 322 MCM on Friday. There was little doubt that panic buying was largely responsible for Friday's increases, as the gas market received little or no support from oil, which traded within a relatively narrow range of $110.50 to $112.00.

This morning
Overall gas demand in the UK has increased overnight reflecting the much colder temperatures that are dominating at the moment. Forecast demand for today is predicted at 320MCM, more than 21MCM higher than at this time yesterday. While this figure is still below the seasonal norm of the 330MCM the supply side is struggling to maintain parity. Gas flows are coming in at 306MCM and the deficit is significant at 15MCM. Gas prices have reacted immediately to the system deficit and the prompt has opened strongly. The within day contract has added 1.95p and is trading at 55.50p while day ahead has surged ahead by 2.10p to 55.75p. The other prompt contracts for the weekend and next week have added 1.60p to 1.90p. On the future market the losses of yesterday have been completed reversed. Most of the movement is focussed at the front of the curve and the February contract is already up by 1.66p at 55.50p. Both March and April have added 1.42p and 0.81p respectively. Contract further out have yet to trade but with crude oil again heading north we expect to see price pressure here as well. Brent crude on ICE is trading at $111.39, up by$0.60 from last night's close.
Thursday
The seven day streak of upward movement on the UK NBP market was broken on Thursday as prices closed lower across the board. Clearly much of the focus was on the front of the curve and the front month February contract lost 1.13p to close at 53.85p per therm. March 2012 shed the most on the day by a marginal amount as this contract fell to 53.38p down by 1.15p. Further out the curve a stronger oil price did offer some support to contracts and price movements here were less pronounced. Iran once again became the focus of world crude oil markets after it upped the ante ahead of the start of new EU sanction. With the new EU embargo set to come into place on the 1st July 2012 Iran announced that it was considering an immediate halt to oil exports to the European Union. Crude remains high and gained by over a dollar on the day thus providing a leg of support for seasonal contracts. Summer 2012 did decline by 0.80p while downward movement on contracts for 2013 delivery and beyond were constrained to just 0.27p.

This morning
European equities markets have opened higher this morning and commodities, including crude oil, have gained also. Upward movement on the oil market is helped by the dollar easing against most major currencies but it is the sustained, if somewhat slow, recovery of the euro which is catching traders attention. The single currency has risen to 1.313 overnight and stands at its highest rate against the dollar in over 6 weeks. The 7 day rally in UK gas prices has stalled with prompt prices down by 0.30 to 0.60p as the market has already built-in a considerable premium to cover the imminent cold spell. Forecast gas demand for today remains below 300MCM but forecast deliveries are running almost 20MCM ahead of this in anticipation of increasing demand as temperatures fall. The supply mix is broadly similar to that of recent days with Norwegian deliveries continuing to make up around 38% of the total. Long-range storage withdrawals from Rough have increased overnight and are currently running at 18MCM. Futures gas prices for the remaining winter months and the coming summer are down by between 0.30 and 0.70p but prices further forward have been slower to release premium as higher oil prices offer support this morning. Brent is trading 80 cents higher at $110.60.
Wednesday
The UK gas market continued it's now 7 day run of increases but yesterday's gains were muted by comparison with most of the previous week's. The prompt did make some appreciable gains as the forecast colder weather impacted and drove exports to mainland Europe higher on the day. Demand o the continent has already risen with lower temperatures spreading across Western Europe and exports via Bacton-Zeebrugge averaged 28MCM yesterday, the highest so far this year. Overall demand on the UK system remained just under 300MCM or 10% below the seasonal norm however and supply matched demand throughout the day. Within day gas recorded the biggest move of the day, gaining 0.80p while the week ahead gained 0.65p. Movement on the futures market was limited with March recording the biggest gain of 0.31p and contracts for Summer 2012 and beyond recording only marginal gains. Brent crude fell below $110 to settle 22 cents lower at $109.81 while West Texas Intermediate gained 45 cents to settle at $99.40 per barrel despite a 3.6 million barrel increase in U.S. crude stocks last week

This morning
UK gas futures look set for a sixth consecutive day of gains if early morning trading patterns continue. Prompt and near futures contracts have opened higher this morning with gains of 0.65 and 0.70p on within day and day ahead contracts. The remaining prompt and near futures prices are up by around 0.50p and trading beyond the Summer 2012 contract is too light to determine any clear picture, although the trend here is upwards also. The within day gain comes despite the system running a surplus of 5MCM over demand, which has fallen by 15MCM overnight to 292MCM. On the supply side, Norwegian deliveries continue at close to maximum rates with Langeled flowing 74MCM this morning. LNG production is running at a combined total of 30MCM while Rough storage withdrawals have fallen off to just 10MCM. On the oil markets, Brent crude is virtually unchanged overnight and is currently trading at $110 flat, while West Texas has fallen 50 cents to $98.50 as the Nymex anticipates an increase in U.S. crude stocks to be confirmed by inventory data due to be released later today.
Tuesday
The UK gas market concluded a fifth straight day on the rise with gains on all contracts with the more significant increases on the futures market. Prompt prices increased regardless of a well supplied system with gains of 0.30p on the balance-of-week and weekend contracts with colder weather expected for the coming few days. The week ahead was up by just 0.10p however as milder weather is forecast for the beginning of February. This did not prevent the February contract from gaining 0.71p on the day and over 3.00p over the past week. The increase for March was 0.77p and prices for the summer months were up by almost a penny. Seasonal contracts further out recorded slightly more modest gains averaging around 0.50p as oil prices retraced Monday's gains, despite the confirmation of an EU embargo on Iranian oil imports. The UK gas system was again comfortably supplied on Tuesday with demand up slightly on the previous day rising to a maximum of 315MCM in the evening but with deliveries matching demand throughout the day.

This morning
Prompt gas prices have eased marginally through early trading today with latest trades for products from day ahead gas through to week ahead gas down by 0.10p to 0.45p against yesterday's close.  Futures contracts are currently trading at around 0.20p to 0.45p above yesterday's ICE settlement prices although they are broadly flat or lower against final traded prices on that platform and on other platforms, including Spectron (ICE settlement prices for yesterday were generally not reflective of final traded prices in the market - for example, the two front months had traded at 54.60p and 53.80p before the close of trading but settled at 54.02p and 53.45p).  The February contract has last traded at 54.45p, March has gone through at 53.85p and the Summer 2012 contract is at 52.65p.  Forecast demand for today is slightly lower than yesterday, at 308 MCM, 27 MCM below the Seasonal Norm and the system is currently well supplied with forecast flows at 311 MCM and instantaneous flows at 318 MCM.  On crude oil markets prices have eased through overnight Asian trading and early European trading.  The March Brent contract has last traded at $110.04, down 54 cents, while the equivalent Nymex contract has gone through at $99.20, down 38 cents.    
Monday
After trading relatively flat for the majority of the day, an increase of around 1.00p to 1.50p on prompt prices fed through to the futures market during late afternoon trading yesterday with prices out to March 2013 increasing by around 0.60p to 0.90p against Friday's close.  With demand running at just 310 MCM, 25 MCM below the Seasonal norm, the system was well supplied on the day.  Langeled deliveries ran at near full throttle, providing the single largest supply contribution at just over 71 MCM.  LNG send-out ran at 40 MCM while production from the Rough storage facility ramped up to around 33 MCM and averaged around 18 MCM for the day.  After falling by $1.70 a barrel on Friday, the front month Brent crude contract increased by 73 cents a barrel yesterday on a combination of factors including the decline of the dollar against the euro, stronger equities and an announcement that the EU had agreed to its much talked about embargo on the import of Iranian crude oil.  With the embargo not planned to take full effect until July, this latter factor was most likely the least influential of the various drivers. 

This morning
The weekend demand on the UK gas system averaged 260MCM and has crept above 300MCM this morning. Forecast deliveries are matching demand while physical deliveries are 10MCM ahead of demand with continuing strong flows of Norwegian gas. In fact combined imports are providing 50% of total supply this morning and if LNG and storage withdrawals are included, this rises to 66% of the total. The withdrawal of gas from Rough long-range storage continues with spot prices offering just a penny premium over the summer price. The forecast cold snap has not materialised as yet and storage holders are keen to sell at current prices since, with storage reserves still at 85% capacity, spot prices for February and March may not be as attractive, particularly if the mild weather conditions continue. The markets have been sluggish this morning, with little movement on within day and day ahead prices but the weekend and week ahead are up by 0.75p in anticipation of increased demand. The futures market has seen very little change from Friday's closing levels while the oil market has recovered a little of Friday's losses and is currently trading 40 cents up at $110.18.
Friday
The euro fell back a little on Friday as the recent rally stalled on concerns over the outcome of crucial talks over Greek debt resolution. The rally on the UK gas market accelerated with little fundamental basis for the gains although the system did run up a deficit against rising demand over the course of the day. Overall demand on the system stood at just 287MCM at 0800 but rose to 305MCM by the close of business as temperatures dipped. System supply, which had been matching demand early on, fell 13MCM short by the end of the day, adding to opening gains on the prompt market to leave the within day price 1.70p higher and day ahead gas for today up by 1.25p. The weekend and week ahead prices were up by 0.60 and 1.10p respectively. On the futures market, there were significant gains on contracts for the coming 6 months with contracts further forward recording more modest gains as falling oil prices acted as a restraining influence. Brent crude finished the week down $1.50, shedding $1.70 on Friday to settle at $109.85.  

This morning
The recovery of the euro in recent days has stalled overnight with the single currency trading at much the same levels against the dollar and sterling as it closed at last night. The relative weakening of sterling has allowed UK gas prices to make further gains however with increases of around a penny on prompt and near futures contracts this morning. Within day gas is trading 0.65p higher but the week ahead is up 1.05p with below average temperatures forecast for early next week. On the futures market, the front month is up by 0.90p and contracts all along the curve are trading 0.50 to 1.00p higher this morning. Demand on the UK gas system is down again today and is forecast at just 287MCM at 0900. Forecast deliveries are matching demand at present with Norwegian supply making up 38% of total demand this morning while LNG send-out has fallen back to just 20MCM and storage withdrawals have ceased completely overnight. On the oil markets, crude prices have eased overnight with the U.S. benchmark, West Texas Intermediate, falling back below $100 per barrel while the European benchmark, Brent crude, has shed 30 cents to currently stand at $111.25.
Thursday
The euro strengthened against the dollar yesterday on renewed hopes of an improvement in the debt crisis in the euro-zone. The single currency hit a 2 week high against both the dollar and sterling, allowing some further gains in UK gas prices. While spot gas prices were lower by around 0.50p compared to Wednesday, the general trend on the UK gas market was upward. The week ahead gained 0.30p and the front month gained 0.17p with March up by 0.30p. Contracts for Summer 2012 and seasonal contracts further out the curve recorded minor gains or no movement on the day. Demand on the UK gas system was down again on Thursday, averaging just over 300MCM or 10% below the seasonal norm. Having begun the day with a surplus of 16MCM, forecast deliveries fell off to leave the system balanced by the close of business. Norwegian deliveries remained strong throughout the day while LNG send-out and storage withdrawals decreased in line with the reduced demand. 

This morning
Gas prices are on the slide once again this morning as gas demand remains low and supplies are boosted by a ramp up of Norwegian deliveries via the Langeled pipeline. Forecast demand for this morning is coming in at 305 MCM and supplies are currently running at a rate of 316 MCM. The current system surplus of 11 MCM is contrast to the position from yesterday morning when the system was short by almost 16 MCM. It is also interesting to note that demand remains 30 MCM or 9% below the seasonal norm of 330 MCM. The level of flows from long range storage remains on par with yesterday while the Langeled pipeline has boosted production to its maximum level. The only other significant change on the system this morning is a reduction in flow rates from the LNG storage facility at Grain NTS 1. The gas prompt is down by more than a penny in early trading as day ahead gas trades at 51.75p and the within day moves to 51.40p. Some but not all of the reduction has fed into future contracts and this market is only down by between 0.20p and 0.35p. Crude oil is trading higher this morning with the Brent contract up by $0.78 a barrel at $111.44 while Nymex has added $1.08.
Wednesday
Having gained in early trading crude oil prices reversed track on Wednesday as the market's attention moved back to the prospect of economic recession in Europe and the International Energy Agency warned that crude oil demand could suffer as a result.   In the U.S. the Nymex contract fell back below the $100 dollar mark and reached a low of $99.85 before rallying to finish almost flat at $100.59 a barrel. Brent closed $110.66 a barrel, down by $0.87. The gas market reversed track on Wednesday and the four day losing streak was broken as prices moved higher. Early gains were sustained throughout the day as the market re-acted to a system shortage. While forecast demand was lower than the previous day, a decline in storage output saw the system go into deficit and this gave early impetus to the prompt and futures markets to go higher. Price increases on gas futures were contained to just 0.57p on average while on the prompt both within day and day ahead gas finished at 52.50p and 52.20p respectively, adding just 0.50p and 0.20p.

This morning
The UK gas market has reversed the trend of the last 4 days and has opened higher this morning. Prompt prices are up by around 0.50p and near futures contracts have gained similar amounts and the dip in Summer prices, or at least the June contract, to below 50.00p may be short-lived. The reversal comes even though demand on the UK system is lower again today at 325MCM and the system remaining well supplied. Norwegian deliveries remain strong and the fall in demand has been balanced by reduced LNG send-out and a halving of long-range storage withdrawals to just 22MCM. Storage holders continue to sell into today's market to take advantage of what little premium is available on within day gas over the summer contract price which amounts to just a penny at present. With long-range storage levels still at 85% of capacity, storage holders are concerned about possible losses being incurred selling gas into a falling market this spring on gas purchased at prices in the mid to high 50's last summer. Crude oil is trading marginally above last night's closing levels with the new front month Brent contract for March up by just 10 cents at $111.63 this morning.
Tuesday
The robust response to higher demand from UK gas supply sources has seen prompt prices ease again while near futures contracts were also down on Tuesday. Demand on the UK gas system averaged 352MCM over the trading day yesterday and deliveries kept pace throughout with particularly strong Norwegian flows and, while LNG production was down by 10MCM on Monday's level, Rough storage withdrawals increased to maximum rates of 45MCM. Within day gas shed 1.80p, day ahead was down by 1.15p and the weekend by 1.25p. The price for the remainder of January was down 0.70p to 51.70p and the February contract lost over a penny, finishing at 51.62p. March also shed a penny but losses on contracts further out were less significant, with the exception of the June contract which shed 0.50p to hit a life of contract low but also become the first summer 2012 contract to fall below 50.00p, finishing yesterday at 49.85p. Nymex crude gained $2.00 to settle above $100 once more and while Brent crude rose by $1.50 intra-day, it fell back to settle just 33 cents up on Monday's closing level at $111.53.

This morning
The euro has strengthened a little against the dollar overnight and has also moved off yesterday's low against sterling. Crude oil has continued to strengthen on fears of supply issues arising from the Iranian embargo. News of continued strong growth in the Chinese economy for Q4 2011 also lent support to oil prices. Gas prices continued to fall however as demand on the UK system eased overnight and is currently forecast at just under 350MCM for today. The UK gas system is again well supplied this morning with physical flows matching demand at 0900. Norwegian deliveries continue at close to maximum rates as do withdrawals from Rough storage. LNG send-out has fallen back to 40MCM in total with equal production rates from the Isle of Grain and Milford Haven. The threat of closure of the Straits of Hormuz could impact LNG supply from Qatar and this is leading LNG storage holders in the UK to conserve stocks. The market has opened lower again this morning with losses of between 1.00 and 1.50p on prices for today and the remainder of this week. The front month is down 0.75p but losses further out the curve are less significant as the market receives support from higher oil prices. 
Monday
UK gas demand reached it's highest level of the current winter so far on Monday with overall demand hitting 362MCM or 8% above the seasonal norm. Falling temperatures over the weekend saw demand climb steadily but the supply side responded strongly with Norwegian deliveries topping 110MCM and LNG send out of 50MCM throughout the day. Monday also saw withdrawals from long range storage at close to maximum rates for the first time this winter as Rough delivered 42MCM over the course of the day. With the system coping comfortably with the higher demand, the prompt market responded by shedding a penny on the within day price and over 2.00p on day ahead and week ahead prices. On the futures market, losses of between 1.00p and 1.50p were recorded on contracts out to summer 2013 while stronger oil prices offered some support further out the curve, limiting losses to 0.75p to 1.00p. The oil market stayed in positive territory throughout the day with Brent finishing $111.20 as European markets shrugged off the credit downgrading of France and 8 other euro-zone countries.

This morning
Demand on the UK gas system is up at 362MCM this morning as the system reacted to cooler temperatures. This level of demand is 35MCM higher than at his time on Friday and it reflects the steady increase in demand over the weekend. At the moment the system is coping well with the additional demand and supplies are running at almost the exact same level as current forecast demand. Having made one of its rare appearances thus far this Winter, Rough storage remains a feature and is sending out 44MCM at this stage. Likewise flows of gas from Norway remain strong as the Langeled pipeline maintains a flow rate of 70 MCM. Gas prices have eased considerably this morning and the prompt has already given up between 1.80p for day ahead and 0.80p for within day gas. Both contracts are trading at 53.50p and 54.10p respectively. On the futures market losses are most pronounced at the front of the curve where contracts from February to April have lost just under a penny on average. Losses on gas seasons are averaging 0.60p at the moment. Having closed lower for the last three sessions crude oil markets are trading up this morning. Brent is priced at $111.30 a barrel on ICE, up by $0.96 from Friday's close.
Friday
The gas market resumed its downward trend on Friday with prompt prices easing by around 0.30p to 0.40p while futures contracts fell by around 0.70p to 0.90p to bring the week on week movements to a relatively tight range of +1.08p to -0.57p. A premium of just 2.00p per therm in Summer gas prices over the within day market was enough to entice some reasonable volumes out of the Rough storage facility on Friday, with production from the UK market's only long range storage facility running at 25 MCM to 42 MCM for much of the day. The facility, which accounts for circa 70% of the market's total storage (including medium and short range storage), has a maximum production capacity of 45 MCM per day. Until recent days, it has been largely untapped this Winter, with stock levels currently at around 88% of total capacity. A further slump for the euro on speculation that Standard and Poor's was set to announce the downgrading of credit ratings for several EU governments proved to be the dominate factor for crude oil markets on the day, with Brent and Nymex crudes down by $0.82 and $0.40 respectively.

This morning
The UK gas system is running a surplus this morning as a stream of cooler weather engulfs Ireland and the UK. The forecast demand for the day is 308MCM, while forecast flow is at 327MCM and physical flows are running at 337MCM. This increased demand is more in line with the seasonal norms of 332MCM. The supply side is robust with LNG send out at 44MCM, imports via Langeled at 64MCM and the balance this morning continues to be made up from long range storage facility at Rough, which is sending out 35MCM. The gas market has been slow to act with the prompt reacting to the cooler weather, while further out on the curve prices have eased slightly. On the prompt within day gas is flat while the day ahead and weekend contracts have added 0.675p and 0.25p to last trade at 55.54p and 55.31p respectively. On the curve, the near months have fallen back from the modest gains earlier to levels just above yesterday's settlement prices, February is trading at 55.10p and March last traded at 54.75p. Further out on the curve the summer contract is marginally lower at 53.44p. Brent crude traded above $112 dollars in overnight trading but has softened to $111.74 a barrel, up 48 cents as the euro appears to be holding yesterday's gains.
Thursday
European equities and energy markets responded positively to successful bond auctions in Italy and Spain yesterday as the euro rebounded from an 18 month low against the dollar on Wednesday. Prompt gas prices gained further ahead of the forecast cold snap but near futures contracts did not follow as in recent days. The UK gas system was well supplied again on Thursday with demand up slightly to 294MCM by the close of business when deliveries ran marginally short but the supply side had more than matched demand for most of the day, with physical deliveries running over 20MCM ahead at times. Despite the strong supply situation, within day gas gained 0.90p, as did day ahead for today but the weekend and week ahead eased slightly in concert with the general trend on the futures market which saw the front month down by 0.38p which in fact was the biggest loss of the day. Having traded sharply higher early yesterday, crude oil fell more than 2.5% in the last hour of trading with Brent finishing 98 cents lower day-on-day at $111.26 while the U.S. benchmark, West Texas Intermediate, shed $1.77 to settle at $99.10.  

This morning
European markets have opened stronger this morning, despite concerns over a Spanish bond auction today. The euro has strengthened against both the dollar and sterling, moving up from an 18 month intra-day low of 1.266 against the dollar yesterday. Having digested yesterday's bearish news on inventory stocks from the U.S. the oil market has re-focussed on supply issues and the situation vis-a-vis Iran and Nigeria. Crude has regained yesterday's loss of a dollar and Brent is trading above $113 again this morning. The UK gas market is trading lower this morning however as the system is again over-supplied and the market re-adjusts to the forecast lower temperatures. The reality is that the forecast of temperatures 1 or 2 degrees below the norm is unlikely to cause problems for the UK at the moment with storage reserves at 86% of full capacity and LNG storage and supply in good health also. The UK system is running a 12MCM surplus against forecast demand of 284MCM, with physical deliveries running at 22MCM ahead of demand this morning. Trading on the UK gas market has been light but prices have eased slightly on all prompt and near futures contracts traded so far. 
Wednesday
The UK gas market turned upwards again despite a strong supply position which ensured the system ran in surplus for most of the trading day. The generally bullish mood on the energy markets, and the forecast of colder weather for the UK from Friday onwards, pushed prompt prices higher. While within day and day ahead gained just 0.35 and 0.55p, the weekend and week ahead were up by 0.80 and 0.70p respectively. An overnight lull in LNG production was reversed and as send-out from Milford Haven - South Hook returned to 48 MCM and Norwegian deliveries remained robust. On the futures market, the front month and March contracts gained in sympathy with the prompt but earlier gains were pared back somewhat as oil prices fell off later in the day. Lack of support from the oil market saw gas futures further out the curve returning minor losses on the day. Crude oil, which had begun trading higher, fell back following the release of US inventory data in the afternoon which showed a big rise in crude stocks and a fall in demand for gasoline and distillates over the past week. Brent crude shed a dollar to $112.24.  

This morning
The euro fell to new 12 month lows against most major currencies overnight, hitting a low of $1.288 this morning as it is undermined by fresh concerns about the euro zone's debt crisis and ahead of a key French bond auction today. The relative strength of the dollar has placed some downward pressure on crude oil however and Brent is trading 50 cents down on last night's settlement level at $113.20. The UK gas market is mixed this morning with prompt prices gaining on a forecast supply shortfall against reduced demand of 306MCM and while forecast deliveries were running 10MCM short, the system is forecast balanced at 10am. Increased LNG send-out from the Isle of Grain is the only change in the supply mix and storage withdrawals, which had been called on for system balancing overnight, have now ceased completely. Earlier gains on the prompt market are being eroded and within day is currently trading 0.35p below last night's closing level. Futures contracts are showing modest losses in early trading and look like giving up the gains recorded yesterday.
Tuesday
The supply deficit on the UK gas system widened through the day yesterday as demand increased from 308 MCM to 320 MCM while deliveries moved up from a forecast 296 MCM in the morning to just 303 MCM by the close of business. Early gains on the prompt market were retained although this was as much in adjustment to rising futures prices driven by the previous day's strong gains on the oil markets. The fact that within day gas gained less than day ahead or week ahead suggests that the market was not overly concerned with the system deficit on the day. Wednesday saw LNG send-out from the Isle of Grain for the first time in over 2 weeks and Norwegian supply increased marginally also. Mid-range storage withdrawals from Aldbrough added to the supply mix but long-range withdrawals were minimal leaving long range storage stocks at over 88% capacity. Gas futures recorded their first gains since before Christmas with seasonal contracts for Winter 2012 and beyond recording gains of over 0.50p with the support of stronger oil prices. Brent crude settled at a 5 month high of $113.70.

This morning
With a somewhat more optimistic air about the European markets this morning, the euro has strengthened slightly against the dollar and gas prices have gained in early trading, but increases so far have been modest by comparison with yesterday. A supply surplus on the UK gas system has seen the within day price shed 0.30p while day ahead and week ahead contracts are up by just 0.25p. A big increase in LNG send-out from Milford Haven - South Hook has swung the system from its recent pattern of supply shortfall to a 20MCM surplus this morning with forecast demand at 282MCM, forecast deliveries at 302MCM and physical deliveries at 317MCM. Norwegian deliveries have also increased with the Vesterled line flowing over 30MCM over the last 24 hours. On the futures gas market, the front month is trading 0.35p higher, as is the Summer 2012 contract and while there has been little activity further out the curve, the indications are that prices here are also on the up with support from crude oil which has reversed yesterday's losses. Brent crude is trading 75 cents higher at $113.20. 
Monday
Having steadily edged lower for the past month, UK prompt and futures prices adjusted upwards on Monday with increases of up to 2.50p on the prompt and 2.00p on near futures contracts. The prompt price adjustment came on a day when the UK gas system was better supplied than most days last week with demand at 292MCM and deliveries matching or only slightly short throughout the day. Within day and day ahead contracts gained 1.85p while the week ahead was up 2.50p as colder temperatures are forecast from this weekend. On the futures market, gains of over a penny were recorded right along the curve, with the remaining winter period attracting the biggest gains. February was up 1.97p and March gained 1.83p as the expected shift to lower temperatures impacted more on contracts closer in. The oil market remained range bound between $112 and $114 on Monday, locked in by the balancing effect of the euro-zone debt crisis on the downside and tensions between Iran and the West on the upside. Brent crude settled 60 cents lower at $112.45.  

This morning
Demand on the UK gas system remained well below seasonal norms over the weekend and supply matched demand throughout. Forecast demand for today has risen from weekend rates of around 260MCM to 292MCM and forecast deliveries are running just 5MCM short. Despite the reasonably well balanced system, prompt prices have turned higher with gains of a penny on within day and day ahead and 1.75p on week ahead with temperatures forecast to drop sharply from the weekend. The supply mix is little changed from Friday with full flows of Norwegian gas via Langeled but restricted delivery via Vesterled. LNG production remains subdued with 20MCM coming from Milford Haven and 13MCM from the Isle of Grain, despite LNG storage at near full capacity and further cargoes due at both locations this week. UK gas futures are also up quite strongly this morning with increases of 1.40 to 1.50p on the remaining winter period and just over a penny on the Summer 2012 contract. Overnight trading on Asian markets has seen another increase in oil prices but the potential upside continues to be limited by dollar strength, the greenback trades at 1.275 to the euro this morning.  
Friday
Gas demand continued to decline on Friday as temperatures rose considerably across the UK and Ireland and the high winds of the earlier part of the week abated. With demand at 300 MCM at close of business, the system remained 5 MCM short, a position which pertained throughout the day on Friday. A fall-off in Norwegian deliveries to St. Fergus via the Vesterled line was largely compensated for by withdrawals from Rough long-range storage, which averaged delivery rates of 20 MCM on Friday. The system deficit was not enough to impact the prompt market significantly but within day gas gained 0.45p and the weekend was up 0.40p. The week ahead price for this week fell by 0.20p but the balance-of-month price was up by 0.79p. Crude oil opened 60 cents higher then fell-off over the course of the day as the euro slipped to a 16 month low against the dollar, sinking to 1.2698 before recovering slightly to 1.2730 at the close of business. Brent crude also staged a weak rally in late trading to settle 32 cents higher at $113.06.

This morning
Gas demand in the UK continues to decline and this morning it is forecast at 298MCM, 6 MCM lower than at the same time yesterday.  Gas system demand is operating well below the seasonal norm and with weather forecasts predicting a continuation of the unseasonably mild weather this dynamic is set to persist, at least in the short term.  Despite the lower demand level the supply side is short at the moment and there is a small deficit on the system of 4MCM.  Short range storage flows out of Aldborough turned down overnight although there is still plenty of storage gas available to balance the system if needs be.  We have yet to see any major contribution from the main long range storage facility at Rough and this remains almost full.  Gas futures are trading up this morning although only the front two months have shown any activity thus far.  Prices increases are modest and range between 0.10p and 0.30p per therm. The prompt remains on par with last night's closing position with day ahead and within day gas quoted at 52.50p respectively.  Crude oil has gained in both the U.S. and Europe this morning with increases in the order of $0.60 a barrel.
Thursday
The UK gas market was mixed on Thursday morning as prompt prices gained on a system shortfall of 12 MCM and on a forecast supply of 306MCM.  On the futures curves modest losses were the order of the day as prices gave up premium added in the previous session.  While the system did open short, the lower demand profile ensured that early price movements were kept to a minimum. As the supply/demand balance became more positive later in the day early gains were eroded and prices generally finished down.  While we have not seen any significant contribution from long range storage so far this Winter, the short range facility did come on for a time on Thursday and its 13 MCM contribution swung the balance.  In the U.S. the Energy Information Administration were reporting a build in crude oil stocks of 2.2 million barrels in the week ended 30th December 2011. The Nymex contract settled lower as a result at $101.81 a barrel, down by $1.41.  Brent also succumbed to the poor demand data out of the U.S. and settled at $112.74 a barrel.

This morning
The euro fell to new 12 month lows against most major currencies overnight, hitting a low of $1.288 this morning as it is undermined by fresh concerns about the euro zone's debt crisis and ahead of a key French bond auction today. The relative strength of the dollar has placed some downward pressure on crude oil however and Brent is trading 50 cents down on last night's settlement level at $113.20. The UK gas market is mixed this morning with prompt prices gaining on a forecast supply shortfall against reduced demand of 306MCM and while forecast deliveries were running 10MCM short, the system is forecast balanced at 10am. Increased LNG send-out from the Isle of Grain is the only change in the supply mix and storage withdrawals, which had been called on for system balancing overnight, have now ceased completely. Earlier gains on the prompt market are being eroded and within day is currently trading 0.35p below last night's closing level. Futures contracts are showing modest losses in early trading and look like giving up the gains recorded yesterday.
Wednesday
Tan early supply deficit on the UK gas system widened through the day yesterday as demand increased from 308 MCM to 320 MCM while deliveries moved up from a forecast 296 MCM in the morning to just 303 MCM by the close of business. Early gains on the prompt market were retained although this was as much in adjustment to rising futures prices driven by the previous day's strong gains on the oil markets. The fact that within day gas gained less than day ahead or week ahead suggests that the market was not overly concerned with the system deficit on the day. Wednesday saw LNG send-out from the Isle of Grain for the first time in over 2 weeks and Norwegian supply increased marginally also. Mid-range storage withdrawals from Aldbrough added to the supply mix but long-range withdrawals were minimal leaving long range storage stocks at over 88% capacity. Gas futures recorded their first gains since before Christmas with seasonal contracts for Winter 2012 and beyond recording gains of over 0.50p with the support of stronger oil prices. Brent crude settled at a 5 month high of $113.70.

This morning
Gas prompt prices and futures prices are trading marginally higher this morning on a combination of higher demand, a relatively modest supply deficit and the impact of yesterday evening's additional increase in crude oil prices with the majority of oil futures contracts typically adding $1.00 to $1.50 to the uplift delivered during the gas trading day.  Forecast demand for today is 312 MCM and while this is comfortably below the Seasonal normal figure of  332 MCM, the current supply forecast is somewhat short of this, at 296 MCM while instantaneous flows are also running at 296 MCM.  The relatively minor supply deficit has barely impacted prices for within day and day ahead delivery which are currently trading in a range of 0.10p to 0.30p above yesterday's close.  The remainder of the prompt market is somewhat higher with the weekend contract showing the largest gain, trading 1.00p above yesterday's close, at 52.50p.  On the futures market, prices are trading around 0.50p to 0.80p above yesterday's close with latest trades for February, the Summer 2012 contract and the Winter 2012 contract going through at 53.25p, 53.15p and 66.60p respectively.  After their strong gains yesterday, crude oil markets are largely unchanged this morning against yesterday's close.   
Tuesday
Gas prices moved to new medium term lows yesterday as the market comfortably shrugged off strong gains seen in crude oil markets where a combination of positive economic data from China and heightened tensions between Iran and the West drove an increase of almost $5.00 a barrel in front month Brent and Nymex contracts.  With stronger crude oil prices acting as a key driver for natural gas prices over the past year, the gas market's resilience to the strong gain in crude oil prices yesterday was particularly noteworthy.  Against that back-drop, the Summer 2012 contract fell by 1.59p to post a new 13 month low of 52.73p, 15.57p below its recent high of 68.30p established on 30 August last and 7.58p below its average settlement price during November 2011, when the February Brent contract averaged $109.38 a barrel or $2.75 below its settlement price yesterday.  Beyond the Summer 2012 contract, the decline in gas prices was more modest, with the Winter 2012 contract down by 0.84p and the 2013 calendar year down by 0.68p to 62.90p.       

This morning
Demand on the UK gas system is forecast at over 300 MCM today for the first time since before Christmas but the supply side has been slow to respond, with forecast deliveries of just 273 MCM and physical flows of 270 MCM at 10am. The Bacton-Zeebrugge interconnector is operating in import mode but with little or no gas currently flowing while the BBL is flowing 28 MCM. Norwegian supply via the Vesterled line is 20 MCM down on recent rates but Langeled is flowing at full capacity. Milford Haven - South Hook remains the only LNG facility in production this morning. Within day gas is trading almost a penny higher in response to the system deficit but day ahead and week ahead gas are trading 1.25 and 0.80p below Friday's closing levels. The UK futures market has begun the new year with losses of 1.50p on the February and March contracts, while the Summer 2012 contract is trading at 52.80p or 1.55p down on Friday's closing price. The oil markets are not in as generous a mood this morning and Brent has gained over $2.00 in early trading to stand at $109.60 at 10am.
Friday
The euro ended 2011 on a weak note having fallen to a 15 month low of 1.2858 against the dollar intra-day before rallying somewhat to finish at 1.2987. The oil market finished the year with a loss over the restricted trading hours of Friday. Brent crude finished 63 cents lower day-on-day at $107.38, remaining at the middle of its trading range of $103 to $110 for December. Brent ended 2011 at a $12 premium to its final traded price of 2010 - a 12.5% increase year-on-year. Nymex crude was up $7.50 or 8% on the same time a year ago, Brent having opened a premium over the U.S. benchmark which stretched to $28 mid-year but had fallen back to under $10 by December. On the UK gas market, Friday's early surplus was eroded as demand increased through the morning and prompt prices responded to a system shortfall by mid-day. Gas futures continued to ease however, and contracts for the new front month February out to Q3 2012 all closed

This morning
After two successive days of gains crude oil prices are range bound this morning as market participants remain cautious ahead of the release of the third quarter U.S. gross domestic product data later in the day. Brent crude has traded at a high of $108.28 and a low of $107.40 so far and is now trading flat to last night's close.  Gas markets have opened relatively quite this morning and recent gains in the oil market are now making their presence felt in futures contracts.  Naturally much of the trading activity is focussed on the front month and it has opened up by 0.46p at 56.26p per therm.  There is only minor activity on the remainder of the curve but the direction of the market a the moment is up with price increases coming in between 0.25p and 0.45p.  Temperatures in the UK and Ireland remain above seasonal norms and this position is expected to remain for the next number of days.  The prompt market remains stable and prices have not moved far from last night's settlement.  Both the within day and day ahead contracts are trading at 54.00p respectively.  The system is displaying reasonable length at the moment with the surplus of supply over demand coming in at 13 MCM.
Wednesday
The uplift in gas prices that occurred on Tuesday has proven to be short lived as prices moved lower during Wednesday's market.  UK NBP contracts opened weaker on Wednesday morning and these losses were sustained throughout the day.  Milder temperatures pervaded across much of the UK and Ireland and gas demand was lower as a result.    As a result of the comfortable system significant losses were recorded on prompt contracts. The initial loss of 3.00p on the within day contract was extended to 5.40p by settlement.  Likewise the day ahead contract gave up 2.15p as it settled at 54.10p.  Futures contracts lost between 0.75p and 0.50p over the course of the day.  Summer 2012 closed at 55.35p, down by 0.61p.  On crude oil markets the February contract on London's ICE futures exchange closed at $107.71, up by $0.98 or just 0.9%. The new front month February contract on the New York Mercantile Exchange traded up by £1.43 at $98.67 a barrel. 

This morning
Yesterday's uplift in gas prices has proven to be short-lived with futures contracts already retracing the majority of yesterday's losses while gas for within day delivery is down by almost 4.00p against yesterday's closing level.  With forecast demand down to 290 MCM, 30 MCM below Seasonal Norms and the system well supplied, the decline in prompt prices is not surprising and beyond the day ahead product, most periods are down by around 1.00p to 1.50p.  On the futures market, January gas has last traded at 55.90p, down 0.74p against yesterday, February is down 0.57p at 56.20p while the March contract has last traded at 56.30p.  Further out, the Summer 2012 contract has gone through at 55.40p and Winter 2012 is at 67.40p, down 0.60p.   On crude oil markets, contracts are generally retaining the  gains seen yesterday with Brent crude for February delivery last trading at $106.67 while the equivalent Nymex contract has gone through at $97.44.  A modest gain for the euro against the dollar is also proving to be price supportive this morning, with the euro last trading at $1.3118 against yesterday’s close of $1.3071.

This morning
In a further disruption to Norwegian gas supply, flow-rates on the Langeled pipeline have reduced to 37 MCM, just half the volume which has been supplied since the beginning of December. While demand on the UK system is down by almost 25 MCM since yesterday, the Langeled problem has left the system struggling this morning with forecast and physical deliveries at just 306 MCM against forecast demand of 348 MCM. Milder weather has softened demand and exports to the continent have halved this morning from a rate of almost 20 MCM yesterday. The interconnector has been shipping an average of 16 MCM to the continent so far this month when normally it would be importing during the month of December. Within day gas is up by 1.40p but as the Langeled problem is still seen as temporary, day ahead is down by 0.45p. Gas futures have hardened somewhat in early trading this morning with the front month up by 0.47p and the Q1 up 0.40p. The gas futures market is responding to an increase in oil prices overnight which has seen Brent crude trading over a dollar higher amid concerns over sanctions on Iranian crude output and a strike by oil workers threatening output from Kazakhstan. 
Monday
Demand on the UK gas system climbed to 371 MCM yesterday which represented a high for the current winter so far and while the system opened in balance, supply failed to match the increase in demand over the day and a 12 MCM deficit had opened up by the close of business. Indeed the closing deficit might have been greater as flows on the Langeled line fell off to zero mid-afternoon leaving physical flows at just 306 MCM at the close of business. The temporary loss of 70 MCM of Norwegian supply turned the prompt market upwards and within day gas, which had been trading up to 2.00p below Friday's level, finished at 57.00p or just 0.05p down on Friday's closing price. Day ahead, which had been down 1.65p, retained just 0.65p of the earlier loss, while the Christmas weekend and week ahead finished 3.50 and 3.30p down. Futures prices continued to ease yesterday, with Q1 prices recording the biggest losses of the day, the full Q1 2012 contract shedding 0.68p. The oil market strengthened with Brent gaining $1.22 intra-day before settling at $103.64, 29 cents up on its previous closing position.  

This morning
Following a weekend of relatively strong demand, milder weather across the UK and Ireland has left forecast demand for today at 358 MCM and with forecast deliveries at 357 MCM, the system is finely balanced. While LNG production has not increased from the 50 MCM send-out of Saturday and Sunday, increased withdrawals from Rough storage are making up the change in demand this morning. Crude oil fell in overnight trading on Asian markets following the announcement of the death of North Korean leader Kim Jong Il but prices have rallied in early trading in Europe and Brent is up by almost a dollar at $104.30. Gas prices are heading in the other direction however with prompt prices down by 1.50p for today and tomorrow. The price for the Christmas weekend is down by almost 5.00p at 52.50p and the week ahead has yet to trade. January is down 0.80p and Q1 by 0.60p as the market views the supply outlook for the remainder of the winter in a positive light. Friday
Demand on the UK gas system remained steady at 344 MCM on Friday as below normal temperatures countered the normal fall-off in commercial demand to maintain overall demand while overall supply remained slightly short. Long-range storage withdrawals from Rough hit maximum rates for a while on Friday but averaged 33 MCM over the day while LNG send-out increased to 70 MCM and Norwegian deliveries remained robust at 110 MCM. Gas prices continued to ease with losses on the futures market similar to Thursday's and bringing the week-on-week losses to over 3.00p on the remaining winter months while contracts further out the curve generally shed between 2 and 3 pence over the week. The prompt market defied the system supply-demand fundamentals, within day and day ahead shedding 0.60 and 0.55p despite the system shortfall on Friday. Brent crude settled 25 cent lower on the new front month contract for February. Crude oil prices have fallen by over $5.00 week-on-week and finished on a 10 week low on Friday.

This morning
The UK gas system has opened with a slight shortfall this morning with the forecast demand at 343 MCM, while forecast flow is at 340 MCM. The demand is 5% above the seasonal norm and is attributable to the cold air stream which has moved in over Northern Europe and is expected to linger for the next couple of days. Norwegian imports are strong from Vesterled and Langeled at over 110 MCM combined. Send out from LNG terminals is also in line with recent days at over 70MCM. The long range storage facility at Rough is sending out 25 MCM this morning. On the energy markets, prompt prices for natural gas have moved lower demonstrating the markets confidence in the supply side at present. Within day gas is down 0.45p to trade at 57.10p per therm, while the day ahead contract has shed 0.70p, last trading at 57.30p. On the curve the nearer months have all had modest losses ranging from 0.15p to 0.30p per therm. Summer 12 and winter 12 are down by almost a half a penny at 56.10p, and 68.00p respectively. February, the new front month for Brent is marginally up this morning by 28 cents, last trading at $103.88 a barrel, while Nymex for January delivery is flat at $93.87.
Thursday
The majority of gas futures contracts reached new 12 to 15 month lows yesterday as gas prices continued to respond to Wednesday's sharp decline in crude oil prices. The front month January contract closed the day at 56.91p, its lowest settlement price since the contract commenced trading on 1 September 2010. Interestingly, when the contract settled that day at 57.38p, the Brent crude contract for January 2012 closed at $83.42.... so even with an increase of over $20.00 a barrel in crude oil prices, the January 2012 gas contract has managed to trade marginally lower than its opening price of over 15 months ago. Perhaps even more notable is the fact that it has declined by 23.69p from its high of 80.60p reached just over 3 months ago, on 30 August 2011. On that day, the January Brent contract closed at $112.68 but with the dollar substantially weaker against the euro at that time, the oil price was around €3.00 a barrel below its current price level. Beyond quarter 1 2012, the decline in prices yesterday was marginal, with contract out to September 2014 down by a range of 0.15p to 0.26p

This morning
Crude oil as recovered a dollar of yesterday's losses in overnight trading as traders close positions on the Brent contract for January which expires today. The dollar-euro exchange rate is little changed but has come back to marginally above 1.30 again this morning. Yesterday's Italian bond auction which saw borrowing rates at almost 6.5% is the last major issue until mid-January and it may be that the markets will settle in the meantime. In the absence of any intervention by the ECB however, the outlook for the next round of borrowing remains a matter of concern for the euro-zone and the markets generally. The UK gas market has opened on a downward pattern again this morning. Within day gas is trading 0.40p down on last night's closing level despite the system running a deficit of 18 MCM against forecast demand of 338 MCM. Near futures prices for January to March are down by 0.30 to 0.50p and there is little or no trading activity beyond Q1 as yet. The supply mix on the UK gas system has seen an increase in LNG production to almost 70 MCM this morning compensating for a fall-off in mid-range storage withdrawals early morning. Exports via the Bacton-Zeebrugge interconnector ceased at 6am while imports via Balgzand-Bacton remain at 25 MCM. 
Wednesday
Crude oil prices shed $5 yesterday on fears of demand destruction in Europe, a strengthening dollar and evidence of further decline in demand in the U.S. The other news story of the day again yesterday was the euro-zone debt crisis and the impact on the euro. The single currency fell below 1.30 for the first time since early January following an Italian bond auction which saw record high borrowing costs of 6.47%. The UK gas market has stepped lower again with losses of over a penny on most prompt and futures contracts. Within day gas was down by just 0.80p as the system carried a supply deficit through the day but day ahead and the remaining prompt contracts were down by between 1.10 and 1.40p. The early supply deficit was eroded as the day went on with LNG production and storage withdrawals stepping up to breach the gap. Near futures contracts recorded similar losses to the prompt with Q1 down by 1.30p and the full year 2012 down by 1.20p to finish below 60.00p again for the first time in a week. 

This morning
European markets are struggling again this morning as the euro remains at an 11 month low against the dollar - trading just above the 1.30 mark. The energy markets remain focussed on the euro-zone crisis as well as the OPEC quarterly meeting taking place in Vienna today. While it is unlikely that OPEC will make any quota changes as prices remain comfortably above $100 per barrel, they, like everyone else will be concerned that the debt crisis is pushing Europe into a second recession which will further impact demand. Oil prices have eased a little overnight following Tuesday's strong gains and the UK gas market is also down this morning, with near futures prices lower by 0.60 to 0.80p. Prompt gas is also down by between 0.40 and 0.80p which is somewhat surprising given that demand on the UK system has risen to 338 MCM and forecast supply is currently lagging demand by 20 MCM. Norwegian deliveries remain robust at over 130 MCM but LNG send-out has fallen to 50 MCM overnight while withdrawals from Rough storage are running at 18 MCM this morning with no mid-range storage withdrawals at present.  
Tuesday
The euro dipped to a 12 month low against the dollar yesterday amid reports of conflicting views among euro-zone states as to how to support the euro. It was reported that Germany does not favour any significant expansion of the EFSF and the markets are at a loss to see how sufficient funds can be made available to support some major bond auctions in January. The fall in the euro went against the general market trends on Tuesday which saw minor gains in equities and commodities, including gas. While the modest gains on the gas futures market were understandable in the context of a more optimistic marketplace, the stronger gains on the UK prompt market were less so, given the background of a healthy supply-demand balance yesterday. The day ahead gained 0.80p on forecast higher demand but the week ahead contract gained 0.85p even though demand is expected to fall in the run-in to Christmas. Oil prices rebounded strongly from losses of over $3 in the past week, Brent crude gaining $2.24 to settle at $109.50.   

This morning
Crude oil prices remain range bound this morning as market participants remain cautious after yesterday's sell off.  Brent crude on ICE has traded in a range of $108.04 to $107.07 and is currently priced at $107.66 a barrel.  The market has a firm eye on the scheduled OPEC  output meeting which will happen tomorrow in Vienna.  There has been some speculation that OPEC may consider cutting output on Wednesday due to a weak global growth outlook and the gradual return of Libyan crude to the market. Falling temperatures across the UK and Ireland has seen gas demand increase day on day but the system is coping adequately at the moment.  Strong Norwegian imports remain a feature this morning with both the Langeled pipeline and St. Fergus Total combining to send out 119 MCM. Long range storage supplies have stepped back overnight and Rough is currently producing 17 MCM.  Gas prompt prices have opened higher this morning reflecting the higher demand profile.  Gains have been constrained to about half a penny with the within day contract trading at 58.75p while day ahead is priced marginally higher at 58.85p.  Gas futures have added on average 0.35p in the first few hours of trading.
Monday
The early positive reaction to the new European initiative on the sovereign debt crisis was short lived and once again the markets' verdict is less than positive.  On Monday crude oil futures declined, along with other riskier assets, as markets grew more worried that last week's actions by European leaders will not be able to prevent the euro zone's slide towards recession.  Brent crude closed down by $1.36, at $107.26 a barrel while on Nymex the U.S. benchmark lost $1.64 to settle at $97.77 a barrel.  The three day streak of increasing prices was brought to a halt on Monday as contracts lost value across the board.  As contracts weakening the majority of the gains added at the back end of last week were retraced.  The bearish feel to the market was led by prompt contracts which opened weaker on lower demand and a long gas system.  The front month January contract shed the most as it moved back to 58.68p, down by 1.37p. Average losses across the futures curve came in at 1.24p with Calendar year 2012 closing at 60.13p, down by  1.32p.

This morning
Gas demand in the UK remained above 300 MCM for the weekend but was well supplied throughout with Norwegian supply particularly strong at 120 MCM. With demand climbing to 318 MCM this morning, deliveries into the system are forecast at 328 MCM as LNG send-out ramps up but there is no call on storage gas at the moment. The markets are retracing some of the gains recorded in the immediate aftermath of Friday's EU summit. European gas prices have already shed most of the value gained on Friday. Within day gas is down 1.70p and day ahead is 1.20p lower. The week ahead is also 1.20p lower while futures contracts are trading between 1.20 and 1.50p lower this morning. The oil market has also shed value in early trading this morning. Brent crude is trading at $107.20 or $1.40 per barrel down on Friday's closing position while the US benchmark, West Texas Intermediate is down by a similar amount. As it now seems unlikely that any further progress will be made in resolving the euro-zone debt issue until the New Year, the oil market may look to supply-demand fundamentals to determine its direction for the remainder of December at least.    
Friday
The evolving outcome of the EU summit on the euro-zone financial crisis struck a more positive note with the markets on Friday as news of a stronger remit for the ECB in managing the EFSF and bailout issues generally was revealed. European and US shares rose as news that tighter fiscal control mechanisms had been agreed by all EU states with the exception of the UK. The energy markets saw a continuation of Thursday's gains with European gas prices up again on Friday and the UK gas market recording significant gains of over a penny on most contracts. The week ahead price for this week recorded a slightly lower gain of 0.85p and the balance-of-month for December was virtually unchanged on forecast milder weather for the latter half of the month while the system remained well supplied. On the futures market, Q1 gained 1.27p and the full year 2012 was up by 1.15p to consolidate its position above 60.00p. At the far end of the curve, gains were tempered by a slight decline in Brent crude price on the day, although the oil market did rally in late trading, the European benchmark settling 50 cents higher at $108.62.   

This morning
While the technocrats add flesh to overnight statements on a new treaty to apply to euro-zone members, the markets have already decided that the EU has failed to act decisively to address the debt crisis. In what may be seen as a two-thirds-baked agreement, the 17 euro-zone member states, along with 6 others, have agreed to new budgetary controls. Sweden and the Czech Republic have to refer the proposal to their respective parliaments and Britain and Hungary have opted out. Of more immediate interest to the markets is the relatively small amount committed to boosting the EFSF, less than €200 billion and the apparent reluctance of the ECB to support member states bond issues. The euro dipped to 1.33 against the dollar overnight but has recovered slightly in the last hour. UK gas prices have gained in early trading. Prompt contracts are up by a penny on average as temperatures fall but the system remains well supplied with Norwegian deliveries and LNG send-out providing over half the total supply 327 MCM against forecast demand of 323 MCM for today. On the UK gas futures market, yesterday's upward shift is being maintained as the front month gains 0.90p and the Q1 price is up by 0.60p.
Thursday
The fall-off in demand which was evident early yesterday proved to be short loved as overall demand returned to the seasonal norm of 320 MCM by the afternoon and while the supply side responded reasonably well, prompt prices still moved higher on the day. Within day gained 0.85p and day ahead gas for today was up by 1.15p as temperatures were forecast to fall again before recovering next week. There was little significant change to the supply mix over the day, apart from a fall-off in storage withdrawals which saw long-range withdrawals drop to 15 MCM while mid-range withdrawals ceased completely. On the forward gas market, near futures gained 0.80 to 0.90p while the Summer 2012 was up by 0.70p. Gains on seasonal contracts further out the curve were limited however as oil prices dropped again yesterday as confidence in a positive outcome to the EU summit waned. Brent crude fell by $1.42 to settle at $108.11. The downward price move comes against increased concern that the today's EU summit will not do enough to address the euro-zone debt issue and an increasingly bearish outlook in the U.S.   

This morning
With demand on the UK gas system down to 308 MCM and forecast deliveries at 317 MCM, the within day gas price is down by 0.50p in early trading. Norwegian deliveries are providing over 35% of total demand this morning with Langeled back at maximum flow rates of 70 MCM. LNG production is falling-off in line with lower system demand. Send-out from the Isle of Grain has fallen from a high of 35 MCM yesterday to just under 20 MCM this morning. Remaining prompt market prices are little changed from last night's closing levels but the futures market is moving upwards again with gains of 0.30 to 0.55p on contracts from January through to September 2012. Oil prices are also strengthening this morning as investors turn to dollar denominated commodities as a hedge against the possible failure of attempts to resolve the euro-zone debt crisis in talks over the next 2 days. With the ECB expected to announce a further 0.25% cut in rates today, European shares are generally on the up but investors will be keeping a close eye on the preparatory meetings ahead of tomorrow's EU summit to gauge the likely success of the summit for the euro-zone and indeed the future of the euro.
Wednesday
Demand on the UK gas system reduced yesterday with temperatures on the increase and a slight reduction in export flows to the continent via the Bacton Zeebrugge interconnector. Early forecast put demand at 325 MCM and this fell to 320 MCM by the close of business while deliveries more or less matched throughout the day. Langeled flows, which had returned to maximum rates of 70 MCM in the morning, fell off in the afternoon. LNG send-out from the Isle of Grain, which matched that from Milford Haven at over 30 MCM in the morning, also fell off in the afternoon. Trading was muted on the prompt market but prices for the week ahead and the balance of December gained by 0.55 and 0.45p respectively. While there was more activity on the futures market, movement was more subdued. With increases across the board, the maximum recorded was for the front summer contract which gained 0.48p. The gas market gains ran counter to general market trends on a day when Brent crude shed $1.28 and Nymex crude was also down on news of another build in US oil stocks.   

This morning
In contrast to the opening position for the last two days where deficits prevailed the UK gas system has opened in balance this morning.  Forecast demand has been predicted at 325 MCM, some 10 MCM lower than at this time yesterday.  The lower demand profile reflects a small change in prevailing temperatures and a slight reduction in exports flow to the continent via the Bacton Zeebrugge interconnector. Gas exports are nominated for today at 20 MCM.  Flows of gas emanating from the Langeled pipeline continue to ramp up and it is apparent that the recent power outage that stopped production has been resolved.  Langeled is sending out just over 65 MCM this morning and this compares very favourably to the maximum rate yesterday of 48 MCM.  Flows out of the long range storage facility at Rough have pulled back overnight by 10 MCM and are coming in at 20 MCM. Activity on the Spectron platform has been muted thus far with few contracts changing hands.  Prices are marginally lower with the day ahead down by 0.25p at this stage.  Gas futures are marginally up with gains constained to between 0.10p to 0.40p. Crude oil is trading flat to last night's close.
Tuesday
UK gas demand continued to climb on Tuesday as temperatures dropped and began to reflect more seasonal norms.  Gas demand for the day was being forecast at 339 MCM early on but this was revised higher still to 343 MCM by late afternoon.  The system did open with an initial deficit of 8MCM and this grew to 11 MCM as demand ramped up intra-day.   The prompt remained largely unaffected by the system deficit and it was only near market close that some prompt contracts finished higher. The within day contract traded to a low of 56.85p before gaining towards the close.  It did however finish lower than the previous settlement by 0.35p. On the futures curve prices stayed lower all day and settled just off the previous close by a marginal amount. Crude oil prices see sawed between losses and gains on Tuesday as the market continued to be impacted by the euro zone financial crisis in general and the recent threat of a downgrade of the euro zone's credit rating by Standard & Poor's in particular. Crude prices in Europe gained on the day with Brent closing up by $1.00 at $110.81

This morning
With demand on the UK gas system at 335 MCM and continuing to climb, the system is again in deficit this morning. The shortfall is not as pronounced as yesterday's however with forecast and indeed physical deliveries running just 10 MCM short of forecast demand at 9am. The power outage at the Nyhamma processing facility which caused the shut-in of the Ormen Lange field yesterday morning was rectified and Norwegian deliveries were restored to almost full capacity overnight. Happily, the market had not over-reacted to yesterday's dramatic downturn in Langeled flows as news emerged of the temporary nature of the problem. LNG production, which had ramped up to 85 MCM overnight, is falling back this morning. Storage withdrawals, which had hit overnight rates of 55 MCM, are also reduced with the restoration of full Norwegian supply. Despite the system deficit, within day and day ahead prices are down by 0.65 and 0.35p this morning. Futures prices are trading lower again today with the front month down by 0.65p and Q1 down by 0.48p. Oil prices are marginally lower as the market digests the threat of a ratings downgrade for many of Europe's biggest economies.
Monday
The UK gas system ran in deficit throughout the day on Monday as the supply side struggled to match increasing demand which was running at 328 MCM, or 10 MCM above the seasonal norm, by the close of business. A supply deficit of 30 MCM at the start of the day was reduced to 12 MCM by the close despite an unexpected fall off in Norwegian deliveries from mid-morning. Langeled flows fell from over 60 MCM at 10am to just 20 MCM by 3pm but a 20 MCM lift in LNG send- out and a similar increase in storage withdrawals helped keep the system from falling further short. Within day gas gained 1.40p on the system performance while the day ahead price was down 0.50p. The week ahead fell by 0.50p however as temperatures are forecast to rise again from the coming weekend. Near futures contracts were down by between 0.75p and 1.00p and Summer 2012 shed 0.47p. Even though crude oil strengthened on the day, gas prices further out the curve all recorded modest losses. Brent crude was up by $1.70 intra-day but fell sharply in late trading to settle at $109.81.  

This morning
With temperatures falling below the seasonal norm over the weekend, demand on the UK system remained strong and is forecast at its highest for the winter so far at 322 MCM for today. The supply side has been slow to respond to the increased demand so far this morning and deliveries are lagging by 20 MCM despite exports via the Bacton-Zeebrugge interconnector having ceased at 0600. Long range storage withdrawals are running at 15 MCM but there has been no significant increase in either LNG send-out or Norwegian deliveries which might make up the supply deficit. Within day gas is trading a penny higher than Friday's closing day ahead price for today but the futures market is back on a downward path following Friday's interruption to the recent trend. Prices for January to March are down by 0.60 to 0.75p while contracts further forward are showing more modest losses this morning as oil prices have strengthened by a dollar in early trading as the euro gains against the dollar on hopes of a decisive move on the part of the EU to address the debt crisis this week. Friday
In a subdued end to the week's trading, UK gas prices had a mixed day on Friday. The prompt market recovered some of Thursday's sharp losses to record gains on all but the weekend contract. Day ahead gas for today gained 2.00p on expectations of higher demand as temperatures were forecast to fall for the next few days. A well balanced system throughout the day on Friday prevented any serious gains on within day gas which finished just 0.20p up over the day. The system maintained a slight surplus over steady demand of 310 MCM throughout the day, with Norwegian deliveries again accounting for over one third of total supply. On the futures market, movement was very limited with January and February easing fractionally but losses for Q1 over the week were almost 3.00p. Contracts further out the curve gained marginally on the day, supported by a dollar rise in the Brent crude price. Crude oil gained on a generally more optimistic market on Friday as traders looked to improved US employment numbers and a better outlook for resolution of the euro-zone debt crisis.  

This morning
While temperatures have fallen across the UK and Ireland and exports to the continent have stepped up, demand on the UK gas system has fallen off to 300 MCM this morning. Forecast deliveries are running 10 MCM ahead of demand and physical flows matching demand at 0900. Norwegian deliveries fell off to just 45 MCM overnight but are rapidly increasing again while LNG send-out is declining. Storage withdrawals were called on overnight but have ceased again since 0600. Market movement is mixed this morning with prompt gas prices easing in response to the strong supply situation but the futures market is strengthening on foot of some optimism that the EU is finally about to take some decisive action to deal with the sovereign debt crisis and the wider threat to the euro. The front month is fractionally higher this morning with Q1 up by 0.25p and the Summer 2012 contract up 0.37p. The oil market has recovered some of yesterday's losses as the dollar has slipped back slightly overnight. Brent crude is heading towards the $110 mark again, having gained 80 cents on last night's closing price while Nymex crude remains above $100, gaining 50 cents overnight.
Thursday
Demand on the UK gas system increased to 312 MCM yesterday, despite a 10 MCM drop in exports via the Bacton-Zeebrugge interconnector. Strong Norwegian supply provided a margin of comfort to the system which maintained a surplus of 4 to 6 MCM throughout the trading day without recourse to storage withdrawals. Within day gas fell by 2.65p in response to the system comfort while day ahead and week ahead both shed 2.00p bringing prompt prices generally down to a range from 55.25 to 56.50p. Losses on the futures market were only slightly less significant with January and February shedding 1.40p and prices along the curve recording losses of between 0.70 and 1.30p. The full year 2012 price fell below 60 pence for the first time in 9 months. Early gains on oil markets on both sides of the Atlantic were reversed as the morning session went on. European crude prices went the way of commodities generally following a downbeat assessment of the European economy by Mario Draghi, President of the ECB. Brent moved firmly below the $110 mark with a loss of $1.53.

This morning
Demand on the UK gas system has increased again overnight despite a 10 MCM drop in exports via the Bacton-Zeebrugge interconnector. Forecast demand this morning is running at 312 MCM with forecast deliveries at 316 MCM at 0900. Strong Norwegian supply is providing a margin of comfort to the system which is operating without storage withdrawals and with substantial reserves of LNG. The net result in terms of price is a significant fall-off of 1.50p on within day gas and 1.25p on both the day ahead and week ahead contracts. Futures prices are moving lower also this morning with January down by 0.75p and Q1 by 0.68p. Unlike yesterday, the losses are not confined to the current winter period as seasonal contracts for summer 2012 and beyond are also showing reductions of between 0.40 and 0.60p. The losses on contracts further out the curve are facilitated by falling oil prices this morning. Brent crude has shed 60 cents in early trading and has dipped below $110 again as the market digests the likely impact of yesterday's announcement of increased lending flexibility on the part of many of the world's major central banks.
Wednesday
The UK gas system opened with 4 MCM surplus yesterday morning with early demand forecasts at 298 MCM and forecast deliveries at 302 MCM and while demand increased to 310 MCM by the close of business, deliveries fell behind by 4 MCM. The shift in the supply-demand balance was not enough to alter the downward trend on the prompt and near futures a markets however, as within day gas fell by 0.40p. Day ahead gas shed 0.55p while the week ahead was down 0.40p. The new front month January contract traded below 60p for the first time yesterday but finished just 0.21p down on Tuesday's closing price at 60.08p. Losses on the remaining winter months were equally modest, while seasonal contracts for summer 2012 and beyond, all recorded marginal gains on the day. Concerted moves by major central banks to improve liquidity and ease rates being charged on bond issues helped buoy the oil market. Brent crude topped $112 in the morning session and Nymex crude hit $101.75 before the US inventory data release burst the bubble and prices retreated in the afternoon.

This morning
Crude oil prices have opened weaker this morning as the market reacts to reports of rising stocks in the U.S. In addition the on-going negative sentiment about the on-going euro zone debt crisis has put in the shade the more positive news on U.S. consumer confidence. Crude has gained strongly over the last two sessions but some of these gains are being eroded this morning as the market moves lower. Latest trades for Brent has seen the price fall to $110.10 a barrel, down by $0.72 from last night's close. On Nynes the WTI contract has pulled back from the $100 mark and is trading at $99.20, down by 59 cents. We will get a clearer picture of the short/medium term direction of crude oil when the latest inventory figures are issued by the U.S. Energy Information Administration later today. The UK gas system is in good shape this morning and early demand forecasts are coming in at 298 MCM while on the supply side deliveries are approaching 302 MCM. LNG production remains on par with yesterday levels while Norwegian imports are running at a combined total of 117 MCM. Early trading on ICE would suggest that the current trade of weaker contracts is set to continue.
Tuesday
Gas market continued to move lower on Tuesday and gas futures in particular ignored any pressure from the spot market and increases in crude oil markets. Tuesday marked the final trading day on ICE for the December contract and prices fell by 1.31p as the contract settled at 58.23p per therm. This particular contract has fallen by 7.87p since the beginning of November and settled over 21.00p lower that it’s traded high point. It is apparent that the market is anticipating strong availability of LNG supplies for the Winter period and a number of deliveries are due in the coming weeks. That said LNG production on the day was only coming in at 48 MCM although ramp up at Milford Haven South Hook saw send out increase to 54 MCM in the early afternoon. Crude oil futures quoted on the Nymex index broke back above the $100 mark on Tuesday and prices peaked at $100.14 at one stage before weakening in the later part of the session to $99.79 a barrel. A combination of the escalating tensions in Iran and further concerns over the European sovereign debt crisis drove prices on the day.

This morning
Overnight delivery rates into the UK gas system have fallen while forecast demand has increased to 307 MCM for today, leaving the system 15 MCM short at 0900. LNG production has dropped from 65 MCM overnight to 55 MCM this morning and long-range storage withdrawals have ceased since 0600. As the December contract expires today, there has been more focus on the January contract in early trading this morning. The new front month has shed 0.56p while other contracts traded are showing more modest losses. Despite the supply shortfall on the UK gas system, prompt prices continue to ease. Within day is trading 0.50p lower and day ahead is also down marginally. On the oil market, yesterday's strong rally which saw Brent gain $2.60 per barrel has stalled, and prices are down 50 cents on last night's settlement levels. With the markets focussed on the euro-zone debt crisis and the reality of double-dip recession now hitting many Western economies, the outlook for oil demand is becoming more depressed and the likely impact of sanctions which might curtail Iranian oil availability seems to be of less significance.
 Monday
The usual increase in demand on a Monday morning was met with a robust response from the supply side of the UK gas system as deliveries outstripped demand of 290 MCM by around 10 MCM for most of the day. Langeled deliveries, which had fallen off to just 20 MCM on Sunday night, ramped up to 70 MCM again by the start of business on Monday morning and were supplemented by a strong contribution of up to 50 MCM on the Vesterled line. LNG production increased by 10 MCM to 50 MCM by mid-afternoon while long range storage withdrawals continued throughout the day, averaging 12 MCM. The healthy supply margin saw prompt prices easing significantly on Monday. Within day and day ahead contracts were down by 1.25p and 1.35p respectively but the week ahead gained 0.75p to align with the December contract price. December itself fell by 0.74p as winter prices continued to ease and prices for January to March were down in a range of 0.59 to 0.71p. Contracts further out recorded only minor losses as the oil market provided some support with a strong rally early in the day. 

This morning
The UK gas system operated with a reasonable level of comfort over the weekend and balance was maintained on both days as demand remained relatively muted for this time of year.  Having made its first appearance for this winter, Rough storage maintained a small presence over the weekend.  This morning the system is operating with a surplus of 11 MCM as demand is forecast at 289 MCM while supplies are coming in at 300 MCM.  While LNG production remains muted, send out is only coming in at 37 MCM, long range storage is still active and send out is being maintained at just over 10 MCM.  Flows of gas via the SEAL pipeline into Bacton Shell have ramped up this morning and send out front this source is 21 MCM, 10 MCM higher than last week.  Langeled flows also remain robust and a steady send out of 70 MCM is being recorded.  Within day gas prompt prices have declined by 1.00p from Friday while within day gas is being quoted at 59.10p, down by 0.60p from Friday.  The retreat of gas futures continues and prices have opened lower once again this morning by 0.40p.  Trading has been light thus far and mainly concentrated at the front of the curve.  Crude oil has been boosted by gains in equities and is priced at $108.58, up $2.18 a barrel.
Friday
The UK gas system opened with a surplus on Friday but the scenario was reversed by late morning and deficits emerged.  Demand was initially forecast at 279 MCM but this was upgraded later on to 288 MCM.  Supplies failed to match up to this figure and only came in at 274 MCM.  The loss of production from some LNG terminals was pointed to as the reason for the deficit and production reached only 35MCM from the various terminals.  The day ahead contract closed at 60.35p, up by 0.40p while within day gas added 1.30p to 60.35p.  The outlook remains bearish however with gas for next week settling at 58.75p, down by 1.45p. The futures market remained largely unconcerned and prices were down across the board for the third session in a row. Carbon prices fell sharply again on Friday, setting another new low for the current phase of the EU ETS.  Carbon fell by 26 cent with the spot price closing at €7.65 per tonne. EUA contracts out to 2014 finished in a range from €7.67 to €9.17 per tonne.  Crude oil futures failed to hang on to the previous session's gains and Brent crude finished the week lower by $1.12 overall. 

This morning
The loss of confidence in the ability of euro-zone governments to deal effectively with the debt crisis is causing investors to switch investment away from the euro-zone completely rather than move to stronger economies within the zone. As the contagion seems to be effecting even the cost of German bonds, the euro has fallen to a seven week low of 1.325 against the dollar this morning. The relative strength of the dollar and sterling has seen both oil and gas prices easing in early trading. Brent is down 90 cents on last night's closing level and Nymex crude is down $1.50 against Wednesday's settlement price - the US exchange having been closed for Thanksgiving yesterday. With the UK gas system in surplus again this morning, prompt prices are down again, within day by a penny and day ahead by 0.50p. The futures market is showing a more consistent pattern of losses today with near futures down by an average of 0.50p on the strength of sterling and the healthy supply outlook for the winter months, while contracts further out the curve are down by similar amounts, assisted by falling oil prices and the halving of carbon costs over the past 6 months.
Thursday
European shares rallied on Thursday as some positive news on German business sentiment offered hope that Europe's largest economy was not heading in the same direction as many others in the euro-zone. Energy market movement was mixed however, with carbon, coal and gas prices falling while oil gained on the day. Carbon shed another 50 cent to drop below €8.00 per tonne yesterday as the market factors in falling demand. The UK gas system moved into surplus yesterday morning and deliveries outstripped demand for the remainder of the trading day. Prompt prices moved below 60p again, within day and day ahead shedding 1.65 and 1.30p respectively. Near futures contracts were also down yesterday, the front month falling by 0.64p while Q1 was down 0.86p. Seasonal contracts for Summer 2012 and beyond were less influenced by the current strong supply outlook and indeed received some support from strengthening oil prices on the day. Brent crude finished 76 cents higher on $107.78 in thin trading as the Nymex remained closed for Thanksgiving.

This morning
Falling demand and a balanced UK gas system is helping prompt gas prices lower this morning. Demand has fallen to 270 MCM or 12 percent below the seasonal norm and deliveries are currently matching this comfortably. Within day and day ahead prices are down by 0.90p and 0.75p respectively while the week ahead is slightly up in closer alignment with the front month. Futures contracts beyond the front month have been slow to trade so far this morning but those that have are showing a tendency to maintain the recent downward trend. While European shares have recovered some ground in early trading today, a rise in the yield rate on German bonds has left the markets in uncertain territory once again. With little concerted action emanating from the EU or indeed the Euro-zone itself, the future of the euro itself is uncertain and despite a marginal improvement against the dollar overnight, there is little confidence showing in European markets, while the US markets will remain closed today for Thanksgiving. With the dollar easing marginally, crude oil prices have risen a little overnight. Brent crude is up 60 cents to $107.62.
Wednesday
The continuing uncertainty surrounding the integrity of the euro-zone began to be felt more directly by Germany yesterday as its latest bond offering was poorly subscribed and the Bundesbank ended up purchasing 40 percent the €6 billion debt offering. The impact was felt on European stock markets which almost all took losses on the day and left some question marks over the likely success of the proposed euro-bond, if German bonds are not selling. The general mood of despondency was felt on the energy markets as UK gas futures shed an average of a penny across the board. Prompt gas prices were down however as rising demand was more than offset by strong supply on the day. Norwegian deliveries topped 110 MCM over the day with the Vesterled line flowing over 50 MCM early morning before falling off to half this rate by the close of business. The loss of confidence in euro-zone economies saw the euro fall 2 cents against the dollar and this was compounded by weak economic data from China yesterday which pushed crude oil lower by $2.00 per barrel.

This Morning
This morning the stock markets await detail of the latest proposal to try to stem the euro debt crisis. A proposal for Eurobonds is to be announced later by Jose Manuel Barroso, head of the EU Commission, in the hope that a joint Eurobond collectively issued by the 17 member states would calm market debt fears.  Markets were struggling to find direction in early trading. The UK gas system is in balance with forecast demand of 287MCM against a forecast supply of 291MCM. This is 7% below the seasonal norm of 309MCM for the day. Imports are strong through Langeled and Vesterled at 106MCM and together with LNG send out are meeting almost 50% of demand. UK gas prices were slow to trade with the prompt seeing most of early action. Prices have eased marginally on all contracts but the day ahead, which has added 0.25p to last trade at 60.70p. On the curve the remaining Winter months are all down by a range of 0.30p to 0.10p. While contracts further along the curve have softened by 0.55p to 0.20p, with Summer 12 last trading at 60.05p and Winter 12 going through at 71.05p. Brent crude last traded at $107.93, which is down $1.10 on last night's settlement. Nymex for January delivery last traded at $96.23 down $1.78.
Tuesday
Gas futures contracts for the remainder of the current Winter eased marginally yesterday despite a relatively tight supply position during the early stages of trading and a further, albeit modest, increase in prompt gas prices.  The day ahead index closed the day at its highest point for the current month and, at 60.83p it settled at around 3.50p above the average price for day ahead gas through the first three weeks of the month.  Further out the curve, gas futures contracts increased by around 0.50p as the market responded to a bounce in crude oil prices on concerns around geopolitical instability following the announcement of renewed sanctions directed at Iran, and its crude oil industry in particular.  Countering the market's concerns around the continuity and sustainability of Iran's crude oil exports, which run at around 2.2 million barrels a day, a degree of downward pressure was applied following news that U.S. domestic economic growth for quarter three had been revised downwards, from 2.5% to 2.0%.

This morning
While general market sentiment remains depressed, European markets are staging a minor rally this morning. Crude oil gained a little on Asian markets overnight and is holding those gains in early trading in Europe. The UK gas market has also bucked the general trend as prompt prices make further gains following yesterday's step increase. Within day and day ahead gas are both trading at 61.00p as the UK gas system is again running at a deficit this morning. Forecast demand for today is 290 MCM and forecast deliveries have been revised sharply downwards to just 268 MCM at 0900 with physical deliveries running at 270 MCM at this time. The Morecambe feeder to Barrow has ceased production in the past hour but otherwise the supply system remains healthy and the market has not over-reacted to the current supply-demand situation. The system deficit is not pressuring the front month price, December having eased fractionally in early trading and as the UK is among the latest EU countries facing into a protracted period of austerity, the market will most likely respond to movement in sterling in the short term while weighing the possible impact of any further decline in economic activity on demand in the longer term.
Monday
As demand on the UK gas system climbed to within 15 MCM of the seasonal norm yesterday, deliveries more or less followed to keep the system deficit at 5 MCM or less throughout the day. Norwegian deliveries increased to almost 100 MCM, having fallen to 80 MCM over the weekend and LNG production was slightly up as the Milford Haven - Dragon facility re-commenced send out at 0800. Despite the reasonable health of the gas supply situation, a step increase in prompt market prices at market opening yesterday was only partially eroded as the day went on and within day and day ahead gas finished 3.20 and 2.40p up on Friday's closing levels while the week ahead was also up by just over 2.00p. On the futures market, early gains were maintained against a background of a gloomy economic outlook for the euro-zone and indeed the UK. Weaker sterling helped UK gas prices to break the recent downward trend, the front month gaining 0.87p and Q1 up 0.69p. Contracts beyond the first quarter recorded only marginal gains as oil followed the general downturn on the commodities and equities markets yesterday.