Throughout yesterday's session, UK gas fundamentals remained more or less unchanged. Weak demand and strong flows from Langeled, which reduced the reliance on storage withdrawals, pushed near curve prices down a little. We expect UK NTS demand to be around 15 mm cm higher today compared to yesterday's figure - this is primarily down to the colder weather. What's more, a rebound could now be on the cards as March 2014 prices are close to the oversold zone.
How did the energy markets close?
Support for NBP prompt gas contracts was found from forecasted colder weather along with a drop in withdrawals from the Easington Rough storage plant. Day-Ahead prices closed at 65.55ppt, while Feb-13 closed just under at 65.5ppt. Elsewhere, we discovered that flows are unlikely to change a lot throughout February - but interconnector flows are dependent on the NBP prompt spread to the ZeeBrugge market. Finally, it's important to note that the LNG output from South Hook averaged just 13mcm/day in January - which is much lower than the 25mcm/day seen during the same period last year. In terms of power, prices were fairly stable yesterday as lower ETS carbon allowances and coal prices held the market, despite rising Brent crude oil. Day-Ahead prices settled at £48.00/MWh, while S-13 climbed just £0.15/MWh to £48.10/MWh.
How did the energy markets open?
We saw a rose of 1.15ppt for Day-Ahead gas this morning following a drop in storage withdrawals from two large UK facilities. There was also a 0.5ppt day-on-day rise for Front-Quarter too - which could be down to supply-side worries based on the country's heavy reliance on Norwegian supplies throughout January. Power's Front-Month March-13 opened up at £48.25/MWh today. Out on the far curve, a fall in ETS carbon allowances was no match from Brent and APi2, with S-13 jumping to £48.45/MWh.
1-year forward prices
Both 1-year forward prices (commercial gas and commercial electricity) experienced a fall this morning, which is displayed in the graph below.
Latest Brent Crude Oil prices
Yesterday saw another day of increases for Brent 1st nearby prices - which closed at a 3-and-a-half-month high of $115.55/bbl. This wasn't widely expected, though, as there was a much more cautious stance on many financial markets. Note: Brent Crude prices are taken from opening market data, and do not represent the price as it changes throughout the day.