Wind production was expected to drop this morning and remain at lower levels for the coming days but milder weather is set to return at the weekend. However, stronger gas is dictating the power market at the moment with traders keeping a close eye on the Ukrainian situation. Gas prices climbed higher yesterday despite a drop in demand levels and a milder weather forecast as the conflict between Russia and Ukraine supported the curve. Fundamentals are relatively unchanged this morning and gas demand is expected to fall further over the next few days but violence in Ukraine continues to push contracts higher today. Today's prices can also be found in an easy to read table on our 'current UK energy price' page.
How did the energy markets close?
Near-curve gas prices closed at a premium yesterday despite a long UK gas system and an expected rise in temperatures. Supply levels were healthy and coped with a slight increase in demand but on-going geopolitical issues drove prices higher. In terms of power, front-month, seasonal and quarterly contracts all climbed higher yesterday and posted similar gains to those observed on the gas curve. Healthy fundamentals curbed some of the gains later in the day but the majority of contracts ended the session higher.
How did the energy markets open?
Gas prices continued to follow an upward trend this morning as violations of the ceasefire in Ukraine continues to control the market. Overall gas flows are largely unchanged and the UK gas system remains long but this did little to restrict the bulls. Movement on the power curve is still dictated by stronger gas and a drop in wind generation has offered support to the Day-Ahead contract. A warmer weather forecast and rising nuclear availability provided some bearish pressure but price increases were evident across the curve.
1-year forward prices
Market close data has revealed that the 1-year forward price for both commercial gas & commercial electricity increased - closing at 49.57ppt and £45.60/MWh, respectively. This can be seen in the graph below. Note: Brent Crude prices are taken from opening market data, and do not represent the price as it changes throughout the day.
Latest Brent Crude Price
Brent 1st-nearby prices showed little change yesterday but an increase this morning has taken prices over $61/b.