Energy Market Analysis – 05-07-2013 5th July, 2013 James Turner
Spot prices are on a downward trend, following the expected rise in renewable power next week. Solar generation has peaked at 21 GWh, combined with improved lignite production has contributed to a bearish market.
Gas NBP spot and near curve prices have followed its power counterpart, with August-13 prices falling to 65.21ppt (0.41%). This is attributed to the warmer weather driving demand down. As the weather is set to improve over the weekend and into next week, we can expect further drops on the front months.
How did the energy markets close?
Day-ahead power closed £0.25/MWh lower, as the Heysham nuclear reactor came back on-line after an unexpected outage. Low forecasted wind generation helps support the price from falling further.
Gas day-ahead prices closed with an increase 0.30ppt; a result of a fall in supply. The lower demand should help counterbalance this over the weekend.
How did the energy markets open?
Gas day-ahead and 2 front months saw drops of up to 0.80ppt, however this sentiment is not seen on the far curve, which gained up to 0.30ppt.
Power prices followed gas this morning, opening up £0.50MWh lower, also with gains on the seasonal contracts – Summer 14 gaining £0.30/MWh and Winter 14 gaining £0.25/MWh.
1-year forward prices
Market close data has revealed that the 1-year forward price for commercial gas went up slightly while commercial electricity made a loss – closing at 68.20ppt and £51.55/MWh, respectively. This can be seen in the graph below.
Latest Brent Crude Oil prices
Very little movement in the oil price today, with the main focus on the non-farm payroll report. Oil is still trading in low volumes following the US Independence Day.
Note: Brent Crude prices are taken from opening market data, and do not represent the price as it changes throughout the day.