18th December 2013 | Posted by: James Turner | Market Analysis
Spot prices moved down yesterday on the back of ample supply levels and lower demand for this time of year due to milder temperatures. Today prices should stay relatively firm as there is little change in fundamentals. Gas prices inched higher yesterday following a drop in Langeled flows leading to a tighter UK system. Today UK LDZ demand has fallen by 3mcm and is 8.9% below the seasonal average, Norwegian and interconnector flows have improved somewhat and milder temperatures are expected; prices should remain firm 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 prices began yesterday’s session with numerous losses but strengthened throughout the day with most contracts posting gains by the end of the day. Day-Ahead rose by 0.60ppt as the system was 15mcm short as Langeled, South Hook and Rough flows dropped. Day-Ahead power climbed £1.45/MWh higher despite the forecast of stronger wind generation levels today. The rest of the power curve was generally bearish but the losses were minor, ranging from £0.10/MWh for Front-Month and £0.30/MWh for Winter-15; weaker Brent and APi2 coal were the main contributors for the downward movement.