5th February 2021 | Posted by: Daniel Birkett | Market Analysis

Gas Power
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Temperatures for next week were revised lower and are forecast to drop well below the seasonal average, lifting residential heating demand. A healthy LNG outlook for February offered some resistance, while an expected drop in renewable power today provided support to the prompt. Wind generation was forecast to subside today which helped the prompt close higher, while the cold weather outlook contributed to gains across the rest of the near curve, with gas supply expected to be tight. The far curve also strengthened on the back of rising commodities.
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Gas prices trade higher this morning as cold temperatures are forecast to arrive in the UK next week which will result in a sharp increase in demand. Further out, oil and coal markets continue to strengthen, helping to lift longer dated contracts.
A high demand outlook for next week continues to support power prices this morning which follow their gas counterparts, with weaker renewable generation also expected in the coming days. Sentiment on the far curve is also unchanged, supported by stronger coal, carbon and oil contracts.

For a breakdown of the current generation mix visit our Power Generation Insights page.

Brent Summary

Brent Crude is at its highest level of 2021 so far, reaching $59.5/b thanks to optimism surrounding a recovery for the US economy and global oil demand.

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 - 08-02-2021

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