View from the Energy Traders

“Given the dark clouds descending on London today, I was a bit surprised to see gas demand open up at 223MCM, which was a bit lower than forecast yesterday for today. It seems that exports are a little lower at 15MCM, temps are set to increase on the continent, but remain no better than seasonal norm for the foreseeable future in the UK. Yikes.

Interestingly Rough curtailed withdrawals last night for commercial reasons according to the operator, it’s not flowing this morning with Aldbrough and Holford having to contribute reasonable volumes to keep balance, with the latter switching off late morning and sending the system short. I’m probably now broadly neutral on the front month valuation, there will however be an LNG delivery on May 6th into South Hook, the Shagra, to watch out for. 219MCM the gas demand for tomorrow at the time of writing.

I also set my cards out on the curve this morning, with surprisingly, a short term bullish note during our morning desk chat – yes I am happy to buy it when needs must – on the premise that U.S. GDP would disappoint given the recent bout of poor earnings data, lacklustre jobless claims / housing data etc.

Anyway, into the afternoon session and a low ball GDP score of just 0.2% vs. 2.2% previously was enough to continue the €/$ ascent. In response, Brent showed little reaction to the weakening dollar though, hmmm, our energy curves just a tad up also. I guess players waiting for final confirmation out of the Fed later tonight. In the meantime though, Interest Rate traders are now pricing a U.S. rate hike now pushed back to Dec.

Elsewhere of interest, EZ lending was up in March, the first rise in 3 years, API stocks data last night returned a build on crude, but inventories at Cushing declined for the first time this year. The EIA stats this afternoon confirmed the draw at Cushing, WTI above $58 at the time of writing, now we are starting to motor, with our seasonal contracts now dealing up.

Potentially putting a dampener on proceedings the Iranian Foreign Minister stated that Iran and the 6 world powers will start drafting work on the final nuclear agreement this Thursday with the aim to get a final deal before June 30 deadline. Something to bear in mind.

Holford has switched back on now late afternoon to balance up proceedings; important news out on carbon that EU member states have provisionally agreed that carbon market reforms should start in 2019, further negotiations expected in May. “