13th August 2013 | Posted by: Daniel Birkett | Market Analysis

The healthy supply levels will continue over the coming days due to the current low demand for power and improved nuclear energy generation. The UK gas system remains long despite reduced flows at the UK's Easington terminal yesterday while demand levels are also rather low following reduced exports to Zeebrugge, which should see the September-13 contract make a loss. 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?

A few gas contracts fell yesterday as a result of the system opening 40mcm long and did not move to the short side at any point during the session. The Day-Ahead contract was influenced by a reduction in flows and made a gain of 0.45ppt. The reduced flows via Langeled were slightly countered by improved flows via St Fergus which were at a rate of 18mcm. On the power curve, Front-month contracts made losses, Day-Ahead decreased by £0.05/MWh and Winter-14 fell by £0.20/MWh as contracts followed their gas counterparts. Improved coal generation and higher nuclear availability reduced the need for more expensive gas-fired generation which also had an effect on prices. Further along the curve contracts were also bearish despite stronger APi2 coal prices.

How did the energy markets open?

Gas contracts made a series of gains as Langeled flows fell to zero and St Fergus was relied on to provide 100% of flows from Norway. Day-Ahead, Front-Month and Front-Quarter all added 0.10ppt to their price, while some contracts on the far curve registered a loss. Day-Ahead power climbed £1.00/MWh higher and followed the direction of coal which rose by $1/tn. The rest of the curve saw little movement although September opened £0.05/MWh higher and Winter-13 fell by £0.10/MWh. Coal-fired generation held the largest percentage of the UK generation mix with a share of 35% while gas-fired generation increased its share to 19% and nuclear fell to 29%.

1-year forward prices

Market close data has revealed that the 1-year forward price for both commercial gas & commercial electricity made a loss - closing at 67.23ppt and £51.18/MWh, respectively. This can be seen in the graph below.

energy market analysis - 13-08-2013

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 added $0.75/b to their price yesterday although WTI prices saw no change; supply issues in the North Sea and Libya are thought to be accountable for the increase in price. The oil market is awaiting the release of macroeconomic indicators but traders are thought to be optimistic.