Traders were eager for any news after speculation of an output cut by OPEC and non-OPEC oil producers. After news of a meeting to discuss output policy, crude oil surged. However, the outcome of the deal left traders unsatisfied – output will be frozen in March on the condition that all producers cooperate. Without a cut, analysts predict prices will not recover. Moreover, with sanctions regarding Iranian oil export recently lifted and Iraq uncooperative there is little chance we will see anything but an increase in output from the major producers.
The pound sterling took a hit after negotiations between the Prime Minister and EU MEPs failed to come to a satisfactory outcome and an EU referendum date was set for June. Further falls came after senior conservative MPs, such as Boris Johnson and Michael Gove, announced their intention to run for the “out” campaign.
Gas prices were under pressure from the fundamentals as LNG sendout increased significantly from the start of the month, providing ample supply. As the month progressed, the higher sendout was supported by higher expected LNG cargo arrival frequency. Pressure from high LNG was curtailed somewhat mid-month by outages on the Norwegian Langeled line and a general uptick in consumption as temperatures fell and wind powered output met with a significant drop in wind speeds. However, with healthy storage levels, storage operators took advantage of a widening premium between the near curve and the far prompt to release significant storage volumes which led to an oversupplied gas system.