Despite lower gas demand on Friday, the UK system still relied on strong storage withdrawals to balance out - which led to higher spot prices and lower prices on the near curve. Today's higher temperatures should help to lower UK NTS demand, but a considerable fall in Norwegian flows to the St Fergus Total terminal left the system very short this morning. This shortfall is pushing April 2013 price higher - but it's unlikely we'll see this pass the resistance level at 70.01ppt today. We're expecting power's spot prices to follow a downward trend over the coming days on the back of warmer weather.
How did the energy markets close on Friday?
Day-Ahead gas closed at 70.5ppt after concerns surrounding supply from LNG and low levels of storage stocks. Out on the far curve, falling Brent prices pressured curve prices. The downward trend we have been seeing can be put down to slow global economic growth and falling demand for oil. Power's curve prices remained almost unchanged on Friday on what was a slow day for trading. The only notable change was on the prompt - where Day-Ahead added £0.35/MWh to its opening level, which could have been down to revised downward temperatures and several outages at power plants.
How did the energy markets open?
Today's market opening was one of the most volatile we've seen in recent months - with Day-Ahead gas opening up 11.40ppt higher than its Friday closing value (now trading at 81.9ppt). This rise came after a notable drop in flows from Langeled over the weekend. Power's Day-Ahead followed its gas counterpart, opening a huge £11.90/MWh higher than its closing value on Friday - kicking off trading at £63.50/MWh today.
1-year forward prices
Friday's market close data revealed a rise in the 1-year forward price of commercial gas (trading at 69.05ppt) and a fall in the 1-year forward price of commercial electricity (trading just 1p/MWh lower at £52.80). As always, the changes are displayed in the graph below.
Latest Brent Crude Oil prices
Following another day of falls on Friday, Brent Crude prices almost dropped to a flat $110/bbl this morning, but settled at $110.4/bbl. The weakening of Brent prices has been caused by several recent events - notably the fall of manufacturing PMIs in Europe and China and the recent political uncertainty in Italy and the Eurozone. What's more, the failure to agree on anticipated budget spending cuts by March 1st in the US will have also had an impact. Meanwhile, Friday afternoon's rise in the US manufacturing ISM helped prices to balance. Note: Brent Crude prices are taken from opening market data, and do not represent the price as it changes throughout the day.