Energy Market Analysis – 27-08-2013 27th August, 2013 Daniel Birkett
A drop in wind production led to higher spot prices yesterday but week and month-ahead prices managed to make a loss due to increased supply levels.
Gas flows via Norway were strong once again this morning and saw average levels of 254mcm which is 73mcm higher than Friday; the September contract is expected to move down as a result.
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?
Gas contracts closed at a discount on Friday with Front-Month falling by 0.70ppt and Winter-13 shed 0.30ppt from its price. The bearish trend displayed on the gas curve was down to ample supply levels and the return of several facilities returning online over the weekend.
The power curve also saw numerous losses except Day-Ahead which failed to register any movement. The price drops displayed on the gas curve were an influencing factor while spot EUA contracts added €0.15/tn.
How did the energy markets open?
Day-Ahead gas went up by 0.30ppt this morning due to the system opening short and a drop in gas flows of 20mcm. Flows via South Hook have been reduced from 21mcm to 11mcm and Holford withdrawals have fallen to 0mcm. Winter-13 rose by 0.15ppt and Summer-14 made a gain of 0.20ppt due to climbing Brent prices.
Gains were seen across the power curve as contracts tracked their gas counterparts with rising Brent a factor in the price increases, lower APi2 and EUA prices managed to offset these gains however. Day-Ahead rose by £2.10/MWh as wind generation is expected to fall below the seasonal average.
1-year forward prices
Market close data has revealed that the 1-year forward price for commercial gas went down slightly while commercial electricity made a slight gain – closing at 66.98ppt and £51.28/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 and WTI 1st-nearby prices went down yesterday despite news of the US planning air strikes to ease tensions in Syria, which should limit or completely stop any oil coming out of the country.