Apollo Energy publishes a daily energy market analysis, focusing on the gas, power and oil markets including a commentary on how the markets close and open. Our analysis provides insight on how the markets are performing and also considers various factors which could dictate price changes in the future.
The analysis also contains a graph which tracks the one-year forward price of both gas and electricity as well as changes to Brent crude oil.
A significant rise in wind levels yesterday resulted in a drop in CCGT demand, while residential demand was reduced by milder weather. Meanwhile, the outage at Oseberg was resolved, resulting in a rise in imports to the UK. This increase in Norwegian flows, combined with improved UKCS production contributed to a long system and prices along the near-curve moved down.
Gas prices moved down during yesterday’s session as milder weather is expected over the coming days and supply levels are comfortable. UKCS has recovered as the Forties pipeline was expected to be fully operational today, resulting in a long system. However, downward movement further along the curve was limited by stronger coal and oil markets.
Day-Ahead gas opened unchanged at the start of yesterday’s session but quickly lost value thanks to a long system. Improved UKCS production helped towards the oversupply, with flows via the IUK pipeline also strong. High LDZ demand limited losses on the near-curve, while a rise in coal prices continued to lift some contracts further out.
Near-curve gas prices displayed losses yesterday as temperatures are expected to rise above the seasonal norm over the next few days and wind levels have increased slightly; resulting in weaker LDZ and CCGT demand. Meanwhile, movement at back of the curve was minimal due to a stable session for both coal and oil markets.