3rd November 2016 | Posted by: Daniel Birkett | Market Analysis

Gas Power
Market Close Market Close
A below average weather forecast and concerns regarding power supply over the coming months helped to push gas contracts higher on Wednesday. Scheduled maintenance in Norway on Friday will also reduce flows by 20mcm, while LNG supply will remain weak. A delayed restart in withdrawals from the Rough storage facility was another supportive factor and cold temperatures led to a 15% rise in residential demand. Temperatures were forecast to fall 4 °C below the seasonal norm next week which helped contracts on the near power curve add to their price. This higher demand outlook and weaker generation levels continued to act as the main market driver, with stronger APi2 coal helping towards gains on the far-curve.
Market Open Market Open
An unplanned outage at the Nyhamna processing plant in Norway has reduced production levels this morning, however this is expected to be resolved later today before tomorrow's planned outage. This expected drop in Norwegian imports has helped to support the prompt despite an oversupplied system on the back of increased UKCS output, with demand levels set to rise 8% above the seasonal norm. The power market has recorded another significant increase this morning with the issue of French nuclear outages an on-going factor, in addition to a cold weather forecast. Weaker renewable generation has also led to an increased reliance on more expensive alternatives such as CCGT, while coal prices continue to rally higher.

Brent Summary

Brent 1st-nearby prices have moved down and currently trade just above $47/b with fresh bearish pressure provided by the latest EIA report. Pessimism regarding a freeze on OPEC production continues to weigh on prices but an attack on a Nigerian oil pipeline helped to restrict the losses.

1-year forward prices

Market close data has revealed that the 1-year forward price for both commercial gas & commercial electricity increased - closing at 47.90ppt and £49.61/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 - 03-11-2016

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