2nd February 2016 | Posted by: Daniel Birkett | Market Analysis

Gas Power
Market Close Market Close
Gas prices recorded losses on Monday and were dictated by the falling oil market in the afternoon, as well as the mild weather forecast for later in the week. LNG supply is also expected to remain comfortable over the next couple of weeks and demand levels were 19mcm below the seasonal norm, resulting in an oversupplied system. A drop in demand on the back of milder temperatures pressured down power contracts on the near-curve yesterday with further direction coming from the weaker gas and oil markets. Wind generation levels remained strong across Europe but high levels resulted in some turbines going offline for safety reasons.
Market Open Market Open
Temperatures are expected to drop slightly over the next couple of days before returning to above average levels towards the weekend, while supply levels are generally unchanged from yesterday. This expected rise in demand should limit losses on the near-curve but overall movement is bearish with falling oil still a factor. Generation levels remain strong this morning as Storm Henry has resulted in high levels of wind, offsetting the effects of two outages at nuclear power plants. Meanwhile, Brent continues to fall this morning which has had a knock-on effect on both the gas and power markets, while coal continues to fall due to market backwardation.

Brent Summary

Brent 1st-nearby prices posted a significant loss yesterday afternoon as it appears that an agreement between Russia and Saudi Arabia in regards to production cuts is unlikely, while the Chinese economy also remains weak.

1-year forward prices

Market close data has revealed that the 1-year forward price for both commercial gas & commercial electricity decreased - closing at 31.35ppt and £35.20/MWh, respectively.

Today's prices can also be found in an easy to read table on our 'current UK energy price' page.

Click graph to enlarge

energy price graph - 02-02-2016