Energy Market Analysis - 31-05-2013

31st May 2013 | Posted by: Gareth Amos | Market Analysis

The demand on our Local Distribution Zones is set to have a bearish effect on prices today; estimated to be 16mm cm below yesterday’s level. Wind generation from Germany is on the rise today, expecting an additional 8 GW compared with yesterday, resulting in a weaker spot power price.

How did the energy markets close?

Day-ahead gas fell 0.1ppt yesterday on the back of a well-supplied system.  Prices on the curve remained firm due to the pound weakening against the euro which in turn worked against the fall in oil. Day-ahead power was up £2.20/MWh following the delayed restart of a nuclear plant.  This was not seen on the front of the curve as July-13 fell by £0.25/MWh, as supply levels are expected to be strong following the completion of maintenance at a number of nuclear power plants.

How did the energy markets open?

Gas day-ahead is up 0.75ppt this morning with a similar sentiment on the far curve. Power did not follow its gas counterpart, shedding £0.40/MWh off the day-ahead due to weaker demand and stronger nuclear supply.  However front months have opened positive, likely caused by the planned maintenance at the interconnector in June.

1-year forward prices

Based on last night’s closing data, 1 year forward gas and electricity prices have both risen by 0.12/ppt and £0.25/MWh respectively - reflected in the graph below.

Latest Brent Crude Oil prices

After closing at $102/bl yesterday, oil has fallen again today, currently trading at $101.6/bl.  The release of US oil inventory data and stronger consumer spending are likely to support prices from falling further. Note: Brent Crude prices are taken from opening market data, and do not represent the price as it changes throughout the day.