30th January 2013 |
Sarah Cooper |
Weak demand supported the UK system yesterday - helping it remain comfortable. At the same time, strong flows from Langeled helped to ease market worries about the extension to the outage on the Norwegian Troll A platform.
A drop of 0.81% was seen for NBP ICE February 2013 prices and TTF Endex February 2013 price were also lower.
We’re expecting UK NTS demand to fall again today, and as the supply remains steady, weak demand could continue to drive Day-Ahead prices down.
Tomorrow’s spot prices for power are expected to be lower as wind production in Germany is set to rise again. Calendar prices were down a little yesterday - closing at €41.11/MWh - a trend which could be quite stable for power calendar prices. Any potential movement is likely to be downwards rather than upwards.
How did the energy markets close?
Yesterday’s session played host to a fall in gas prices, with Day-Ahead losing 0.45ppt on its opening price. The front month premium to Day Ahead edged closer as it fell below the 1.0ppt level.
An expected fall in temperatures over the coming days pushed prompt power prices a little higher, while Seasonal contracts saw some losses (W13 down £0.10/MWh and S14 down £0.15/MWh).
How did the energy markets open?
A fall in gas storage withdrawals was seen this morning, as some sites are still using the milder weather to top up their stocks. When we compare figures to the end of last week, storage withdrawals have halved.
Day Ahead gas and Front Month prices rose 0.65ppt and 0.40ppt respectively on open.
Despite higher wind generation, Day Ahead power rose £1.70/MWh as the markets opened. Wind generation is expected to peak at over 5GW today, but we could see a drop later on this week.
1-year forward prices
The 1-year forward prices for business electricity and business gas both experienced a fall - which is displayed in the graph below. Power dropped to £50.78/MWh, while gas fell to 66.60ppt.
Latest Brent Crude Oil prices
We saw Brent 1st nearby smash its recent range around the $113 mark this morning - topping $114.57. This rise now means the ‘door is open’ to prices as high as $116 or even $117.
Later today, the EIA weekly report should bring in some pressure, particularly for gasoline which has fared well this past week. The main focus, however, shifts towards US data (ADP and Q4 GDP).
Note: Brent Crude prices are taken from opening market data, and do not represent the price as it changes throughout the day.