Spot power prices are expected to climb higher over the next few days despite a strong wind generation forecast for the rest of this week. The power market has instead taken direction from a colder weather forecast with temperatures expected to be below the seasonal norm for the majority of April. The current cold stint pushed demand levels higher which led to an under-supplied system yesterday, supporting most gas contracts. The system remained short this morning following a drop in BBL flows and LNG send-outs; further gains can be expected. Today's prices can also be found in an easy to read table on our 'current UK energy price' page.
How did the energy markets close?
Day-Ahead gas moved higher yesterday as demand levels increased and output at Centrica's pipelines dropped. Centrica's North Morecambe gas field suffered an outage and this led to a halt in flows via the Barrow terminal. Elsewhere, April-15 and Summer-15 both displayed gains due to the colder weather forecast. On the power curve the prompt contract displayed little movement yesterday as strong wind generation has countered a rise in demand. Meanwhile, a below average weather forecast has helped the font-month contract climb higher.
How did the energy markets open?
Movement on the gas curve was rather mixed this morning as a short UK gas system supported the near-curve, while easing concerns regarding Centrica output helped to weigh on seasonal contracts. Power prices largely followed the movement of gas although Day-Ahead power was dictated by a slight drop in wind production tomorrow and added £0.75/MWh to its price. Cold weather remains an influencing factor although temperatures could be milder than initially expected.
1-year forward prices
Market close data has revealed that the 1-year forward price for both commercial gas & commercial electricity recorded a loss - closing at 48.38ppt and £45.73/MWh, respectively. This can be seen in the graph below.
Note: Brent Crude prices are taken from opening market data, and do not represent the price as it changes throughout the day.
Latest Brent Crude Price
Brent 1st-nearby prices have recorded a loss of $0.49/b and currently trade at $55.04/b as talks regarding Iranian sanctions continue despite yesterday's deadline.