Spot power prices fluctuated throughout last week and the market is expected to remain volatile for the coming days. Wind generation levels are currently higher than previous weeks, helping to weigh on the prompt, while mild temperatures are expected to return at the weekend; today's outlook is bearish as a result. Gas prices eased on Friday following three days of successive gains, with a â‚¬15m payment by Naftogaz to Gazprom ending Russian supply concerns for the time being. Fundamentals are generally bearish as above average weather is forecast to return and numerous LNG deliveries are expected to arrive in the UK; further losses are likely. 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?
Gas prices initially opened higher on Friday as the Rough storage facility suffered a number of outages. However, an increase in Norwegian output and strong LNG supply contributed towards a comfortable UK gas system which helped contracts on the near-curve move down. The power curve took direction from weaker gas and the majority of contracts displayed a loss. Carbon contracts also weakened which offered further support to the bears and an expected increase in wind generation weighed on the prompt.
How did the energy markets open?
The gas curve has continued to display a bearish trend as a revised weather forecast predicts an improvement in temperatures towards the end of the week and overall supply is healthy. A number of LNG deliveries are expected in the UK this month and tensions in Ukraine have eased. Strong levels of wind are expected this week which has helped Day-Ahead to shed from its price. An expected drop in demand at the weekend has also helped contracts record a loss with further bearish pressure coming from weaker gas.
1-year forward prices
Market close data has revealed that the 1-year forward price for both commercial gas & commercial electricity decreased - closing at 49.33ppt and £45.60/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 recorded gains on Friday to climb towards $63/b, with support coming from an improved outlook in terms of global oil demand; prices increased by around $10/b over the month of February.