Yesterday spot prices closed at a premium as a result of cold temperatures leading to increased demand, while stronger gas prices also helped contracts move higher. Today there has been a slight improvement in wind production but the continued cold weather limited any losses. Gas prices held firm yesterday as a reduction in Norwegian flows had little effect on the UK gas system which was long throughout the session. Today prices moved up because of higher demand levels, despite a healthy supply outlook. 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?
Norwegian flows were limited following a few outages at gas fields, this had a significant impact on flows going into mainland Europe but the UK was unaffected. Day-Ahead displayed practically no change as the system was long for most of the day, while Front-Month climbed 0.30ppt higher. Day-ahead power rose by £2.00/MWh and took influence from the higher gas prices, colder temperatures in the UK and limited wind production. Front-Month increased by £0.05/MWh, February-14 opened unchanged and the rest of the curve registered small gains. Expensive gas-fired generation was required to make up for the drop in wind generation which added to the curve's bullish sentiment.
How did the energy markets open?
The gas curve saw price increases across the board despite a long UK gas system and a better outlook in regards to Norwegian flows. The Rough storage facility started the session with a withdrawal rate of 16mcm while both interconnectors saw improved output of around 5mcm. On the power curve, Day-ahead decreased slightly following improved wind generation levels, although the colder weather restricted the losses somewhat. Monthly contracts all went up with January-14 registering the largest gain of £0.45/MWh. Several power units remain offline including a nuclear reactor at Heysham and a coal-fired unit at Fiddler's Ferry.
1-year forward prices
Market close data has revealed that the 1-year forward price for both commercial gas & commercial electricity went up - closing at 68.15ppt and £53.05/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 Prices
Yesterday Brent 1st-nearby prices failed to register much movement, adding just $0.04/b. This morning Brent climbed by $1.32/b following strong economic growth in the US and China.