4th July 2016 | Posted by: Daniel Birkett | Market Analysis

Gas Power
Market Close Market Close
Gas contracts moved higher by the end of Friday's session with a drop in production levels in Holland providing support, in addition to a rise in coal and oil prices. Overall fundamentals were largely unchanged, with higher exports to Belgium being offset by increased LNG send-outs and a rise in Norwegian flows. Numerous LNG deliveries are expected to arrive at South Hook from Qatar in the coming weeks which led to the jump in send-outs. The UK gas system is close to balance this morning as strong exports to Belgium continue. Healthy LNG send-outs and Norwegian imports have prevented the system from falling short but Dutch production has decreased further, offering support to the near-curve. Further out, contracts continue to follow rising oil and currency markets and have posted gains.
Market Open Market Open
Wind generation was forecast to remain high over the weekend which helped to weigh on the Day-Ahead contract on Friday. However, movement on the rest of the power curve was bullish as contracts tracked the movement of their gas counterparts and rising Brent. Gains can be observed across the power curve this morning with direction coming from stronger gas, coal and oil markets. The weakening Pound also continues to drive prices as this can result in more expensive European imports. Meanwhile, temperatures remain below the seasonal norm which could result in an unexpected rise in heating demand.

Brent Summary

Brent 1st-nearby prices have increased over the weekend, climbing to above $50.4/b this morning. Prices found support from on-going tensions in Nigeria and Iraq, potential strikes in Norway and bullish announcements by OPEC.

1-year forward prices

Market close data has revealed that the 1-year forward price for both commercial gas & commercial electricity increased - closing at 42.30ppt and £43.93/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 - 04-07-2016