Energy Market Analysis – 14-08-2013 14th August, 2013 Daniel Birkett
Spot prices fell slightly yesterday on the back of healthy supply levels and lower demand despite cooler weather and the school summer holidays. Wind and solar energy generation is expected to go down slightly as the week goes on but demand is expected to remain low.
UK gas supply and demand should display a balanced outlook today but gas 1st-nearby prices are expected to take direction from currently bullish oil prices.
Today’s prices can also be found in an easy to read table on our ‘current UK energy price’ page.
How did the energy markets close?
Most gas contracts made gains yesterday except a few monthly contracts, with NBP rising by 0.20ppt. Maintenance restricted flows via Langeled which led to Day-Ahead going up, closing at 65.15ppt.
Day-Ahead power climbed by £1.40/MWh intra-day and closed the session at £48.50/MWh which widened the power/ gas spark spread to 0.30ppt. Front-month rose by £0.15/MWh and took direction from stronger coal prices which closed at $76.5/tn.
How did the energy markets open?
Front-Month Brent opened at $109.43/bbl after rising for the third day running due to various supply issues which led to gas contracts posting gains. Extra withdrawals were required from the Holford storage facility to balance the system as flows via Langeled stood at zero.
Power contracts saw similar movement to the gas curve and opened the session higher, seasonal contracts climbing by around £0.20/MWh. Day-Ahead was an exception to the bullish movement and fell by £2/MWh to open at £46.50/MWh due to a higher wind generation forecast.
1-year forward prices
Market close data has revealed that the 1-year forward price for both commercial gas & commercial electricity went up – closing at 67.49ppt and £51.35/MWh, respectively. This can be seen in the graph below.
Note: Brent Crude prices are taken from opening market data, and do not represent the price as it changes throughout the day.
Latest Brent Crude Prices
Brent 1st-nearby prices went up by $0.85/b in yesterday’s session and closed at $109.5/b, reaching a peak of $110/b before falling in the afternoon. Prices are currently trading below $109.5/b at present and are influenced by positive retail data coming out of the US.