4th January 2021 | Posted by: Daniel Birkett | Market Analysis

Gas Power
Market Close Market Close
Gas prices eased down slightly before the Christmas period but overall sentiment remained bullish due to expectations of higher demand and tighter supply for Q1-21. Near curve power prices were dictated by the forecast of freezing temperatures over the holiday period, significantly lifting heating demand, while renewables were also limited. A tighter gas outlook and rising commodities also contributed to increases across the curve.
Market Open Market Open
Gas prices continue to find support from the current cold stint, which is forecast to continue throughout January, lifting demand for heating. Healthy wind generation has offered some resistance but LNG send-outs are expected to be reduced over the coming weeks and rising carbon offers additional support. Power prices follow the gas market and display gains this morning, with cold weather the main market driver in the UK. Improved wind levels have limited upward movement on the prompt, while the far curve has found support from stronger carbon allowance contracts.

For a breakdown of the current generation mix visit our Power Generation Insights page.

Brent Summary

Brent Crude has moved marginally higher over the last week as OPEC members are likely to extend production cuts beyond the current expiry date; Brent currently trades around $51.8/b.

1-year forward prices

Market close data has revealed that the 1-year forward price for both commercial gas & commercial electricity climbed higher, closing at 46.15ppt and £54.53/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 - 04-01-2020

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