25th August 2016 | Posted by: Daniel Birkett | Market Analysis

Gas Power
Market Close Market Close
Improved supply levels helped to weigh on near-curve gas prices on Wednesday, with higher Norwegian flows into Europe and an increase in LNG send-outs in the UK, with several deliveries expected before the end of August. Contracts further along the curve remained bearish with falling oil the main market driver. Power contracts on the far-curve continued to post losses yesterday although movement at the front of the curve was minimal. Weakening gas was the main market driver with Winter-16 displaying a loss of £0.40/MWh. Temperatures were expected to decrease slightly today which will limit cooling demand, although wind generation is also forecast to drop and the prompt was stable as a result.
Market Open Market Open
The UK gas system is well-supplied this morning on the back of higher storage withdrawals and improved UKCS output, while demand levels are also comfortable. This has helped prompt contracts to decrease despite scheduled maintenance in Norway next month. Sentiment further along the curve is generally unchanged with another drop in Brent helping contracts move down. Losses can be observed across the power curve this morning with falling gas, coal and oil contracts the main factor behind the downward trend. The usual drop in industrial demand on Friday's, combined with an increase in renewable generation has also helped the prompt open at a significant loss.

Brent Summary

Brent 1st-nearby prices display a small loss this morning on the back of bearish reports in the US in regards to crude oil stocks; prices currently trade just above $49/b.

1-year forward prices

Market close data has revealed that the 1-year forward price for both commercial gas & commercial electricity decreased - closing at 38.24ppt and £41.86/MWh, respectively.

Today's prices can also be found in an easy to read table on our 'current UK energy price' page.

Click graph to enlarge

energy price graph - 25-08-2016

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