4th July 2013 | Posted by: Daniel Birkett | Market Analysis

Close to 3GW of power generation is offline due to unplanned outages, which is likely to sustain spot prices over the weekend. Kollsnes gas processing plant was also out yesterday due to a power cut, tightening flows into the UK and pushing the NBP spot prices up.

How did the energy markets close?

Day-ahead power gained £0.15/MWh yesterday, due to increased demand.   However, front month contracts continued their bearish streak, as coal fired power generation rose. The unexpected fall in Norwegian generation initially led to a short system and high near curve prices, however flows were not affected enough, and Front month contracts (Aug-13 & Sep-13) fell 0.15ppt.

How did the energy markets open?

Day-ahead power gained £1.50/MWh this morning, as wind generation declined and the more expensive gas-fired generation took a greater share of the fuel mix.   Out on the far curve, prices were less volatile with winter-13 losing £0.20/MWh and summer-14 gaining £0.25/MWh. Gas day-ahead price dropped 0.6ppt this morning following strong UKCS flows as well as a steady flow from Langeled, despite the concern over the Kollsnes processing plant.   The far curve shed 1ppt as the pound strengthens amid Euro Zone debt troubles.      

1-year forward prices

Market close data has revealed that the 1-year forward price for commercial gas and electricity fell by 0.23/ppt and £0.10/MWh - closing at 68.15ppt and £51.60/MWh, respectively. This can be seen in the graph below.

Latest Brent Crude Oil prices

Oil rose again yesterday, reaching an intraday high of $106.03/b.   Oil prices will likely react to news from Egypt, as President Morsi was forced out of office, but as US markets are closed today and fluctuations will be seen tomorrow. Note: Brent Crude prices are taken from opening market data, and do not represent the price as it changes throughout the day.