Norwegian Gas Output Continues to Beat Forecast

Norwegian gas production of 10.5bn m³ – a preliminary figure – in April beat the government's forecast for the month, while oil and liquids remained in line with the December 2015 expectations. Each month this year its gas forecast has been less than what was actually produced. March final gas output was 11.2bn m³, the same as the preliminary figure. The forecast for March was 10.37bn m³.

April's gas output was forecast at 270mn m³/d, compared with the out-turn of 350mn m³/d. Lower gas prices than last year and the cap on the Dutch Groningen field's output are possible reasons for the rise in nominations, and temperatures in northwest Europe were cooler this April than last.

The average UK balancing price for April 2016 – a rough proxy for within-day delivery – recorded by operator National Grid was 29.49 pence/therm ($4.22/mn Btu), down by 37% from 46.86 p/th the previous April.

UK national transmission system gas demand averaged 255mn m³/day, up 23% from the 207mn m³/day recorded for the same month the year before, with lower gas prices boosting gas-fired power generation. The UK is a key market for Norwegian gas output.

William Powell