5th February 2013 | Posted by: Daniel Birkett | Market Analysis

The UK gas system opened up trading a little short yesterday, but regained balance later in the day following a revision in demand. NBP spot and near curve prices ended the day slightly higher, but a lot lower than their intraday highs. We're expecting today's UK NTS demand to be 8 mm cm higher compared to yesterday's level, which can be attributed to the cold weather. Despite this, overall supply is reasonably comfortable, particularly Langeled flows. We could also see March 2013 prices edge lower today, as the UK system is operating long this morning.

How did the energy markets close?

Despite their 'bullish' start to the week, gas prices lost momentum throughout the day yesterday - as Brent prices softened. Front contracts were the heaviest hit by this slow-down, with Front-Months falling over 0.6ppt intra-day. Turning to power, Day-Ahead was the only contract that witnessed a rise on Monday - closing at £48.85/MWh, with the rest of the curve following falling gas and oil prices. The rise in Day-Ahead is likely to be down to colder forecasted weather over the next two weeks, along with a planned refuelling at Heysham nuclear power plant.

How did the energy markets open?

NBP gas prices continued to perform well while Front-Months fell 0.25ppt overnight. Today's system opened 16mcm long as total gas flows were pumped higher to meet the increased levels of demand. Day-Ahead power opened up at £49.30/MWh - refusing to follow the downward trend. Wind generation still holds almost double its average share; with an 11% share in the generation mix.

1-year forward prices

Following the sharp rise we saw yesterday, 1-year forward prices for commercial gas and commercial electricity sat back a little. Both are now standing at 67.23ppt and £51.55/MWh respectively. This can be seen in the graph below.

Latest Brent Crude Oil prices

Yesterday saw a correction in Brent prices, as profit-taking phase on high-risk assets took hold. Brent 1st nearby resistances now sit a little lower at $115.6, $116 and $117/bbl. Today, focus will be pointing towards the Eurozone, specifically on the retail sales and services PMI surveys. Following this, we'll be looking towards the US services sector and the weekly API report later today. Note: Brent Crude prices are taken from opening market data, and do not represent the price as it changes throughout the day.