October proved overall to be a bearish time for the markets with a substantial amount of LNG sendout and a milder than normal month leading to a drop in domestic gas demand.
At the beginning of October NBP gas recovered slightly from September’s lows following news regarding export capacity from the Groningen gas field being reduced in 2016, members of the Dutch parliament have tabled a motion to cut production for safety reasons. The increase in gas prices have also been seen on the prompt gas market.
Although the markets have seen a net bearish trend, Norwegian imports have seen a great deal of fluctuation with numerous outages both planned and unplanned. Langeled flows ramped up steadily early in the month following the return of Troll gas field to full capacity. High exports to Belgium via IUK mid-month helped ease some of the bearish pressure. Late in the month an outage at an unnamed Norwegian gas field and the Skarv field caused imports to drop significantly. Kvitebjorn also suffered a power failure and Langeled nominations fell to the lowest levels since its shut down for annual maintenance in May, which forced the system into heavy undersupply.
The pound fluctuated against the Euro with news at the beginning of the month that the GDP per head in the UK was higher in the second quarter of the year than it was in 2008, before the recession, helping it gain value. The Euro then gained strength against the pound as a result of an unexpected fall in the UK consumer prices for September.
Brent began the month with a downward trend on the back of ongoing oversupply, poor economic growth demand and a reduction in the threat of Hurricane Joaquin to the Atlantic coast. Later, crude oil contracts rose as forecasts suggested a more bullish outlook. This was compounded in the later part of the month with the IEA decision to cut global oil growth forecasts, estimating oversupply would continue into 2016. In the final week, Brent fluctuated with poor Chinese economic data and news that the UK GDP growth rate declined in its third quarter.