The view from the Energy Trading Desk

“Well we mentioned last week that there was a bout of colder weather on its way, daytime it’s pleasant enough but the chilly evenings have resulted in demand ticking back up above the 200MCM mark, the system is a bit short in consequence although LNG and Holford have both notably stepped up, whilst Rough also flicked on into the afternoon session – given the w/d premium to the front months, a veritable no brainer.

I’m hoping that that is it now in terms of recent price ascensions and touch wood it does indeed seem to be the case now at the close; note Troll is also back from tomorrow, perhaps resulting in that May contract getting sold down. In truth it’s been hard to work an angle further out on the curve, with widish spreads the order of the day. Brent opened up marginally higher following another drop in the rig count stats posted late on Friday, but the NBP has been fairly lacklustre, only on a bout of dollar weakness and Brent subsequently heading towards a day high of $65.61 did it allow me to pick off some bids on the seasons.

So I’m still bearish out there – I mentioned last week the NBP fundamentals look fairly weak, so despite upwards moves on Brent, in reality I think it’s better to focus on this, as markets otherwise seem rather disconnected of late. There is perhaps just too much (economic) uncertainty out there at present, consider today Greece optimism, will this be short lived? Sterling hit a 7-wk high on the back of latest poll readings giving the Tories a 6 point lead, can they hang on to it? Elsewhere this week the FOMC, U.S. (and UK) GDP reads are all high risk events. You can also add in BOJ and RBNZ rate decisions and some Chinese investor exuberance to the plot.

Sticking with the fundamentals theme to wrap up – an interesting article in the press on the commute this am, stating that the U.S is set to launch a “blitz of gas exports” as soon as this year… “