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

Gas Power
Market Close Market Close
Gas contracts initially opened higher on Monday on the back of weak LNG send-outs and a colder weather forecast for next week. However, a sharp rise in Norwegian imports via the Langeled pipeline in the afternoon resulted in an oversupplied system and erased some of the morning's gains. The downward movement further along the curve was slightly restricted by a drop in the Pound and rising oil prices. Weak wind production was forecast for today which supported the prompt on Monday, with an expected drop in temperatures next week resulting in gains on the rest of the near-curve. A jump in oil prices continued to push far-curve contracts higher, although a weaker Pound and improved gas supply limited some gains.
Market Close Market Close
The overall supply picture is more comfortable this morning as Norwegian exports have increased further, reaching their highest levels since the end of July. The UK gas system remains long, helped by weaker residential demand compared to yesterday, although a colder weather forecast continues to offer some support. The overall outlook for gas prices today is generally stable. Changes on the power curve are mixed this morning as a cold weather forecast for later in the month has helped to lift prices on the near-curve. The prompt is the main exception to the upward movement at the front of the curve as wind generation is expected to rise over the coming days, while the recovery of European fuel prices has pressured down some contracts on the far-curve.

Brent Summary

Brent 1st-nearby prices continue to move higher and have edged above $50.5/b this morning with last week's OPEC announcement still providing bullish sentiment.

1-year forward prices

Market close data has revealed that the 1-year forward price for both commercial gas & commercial electricity decreased - closing at 42.59ppt and £43.83/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 - 04-10-2016

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