6th January 2021 | Posted by: Daniel Birkett | Market Analysis

Gas Power
Market Close Market Close
News of a national lockdown was the main market driver yesterday, pushing prices higher due to an expected drop in demand for fuel this month. Cold temperatures also lifted LDZ demand, while weaker wind generation is expected to increase reliance on gas-fired power. Wind levels were forecast to drop sharply today, while temperatures will remain cold for the next fortnight, tightening the gas system. This lifted power contracts across the near curve, with news of a UK lockdown also a contributing factor.
Market Open Market Open
Gas prices trade marginally higher this morning with a sharp rise in oil prices helping towards gains towards the back of the curve. Prices on the near curve continue to find support from cold weather which is expected to continue throughout January. Energy prices climbed higher overnight as oil markets increased on the back of extensions to production cuts. A drop in wind levels and cold weather continue to offer support, while volatility on the GBP also impacts European markets.

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

Brent Summary

Brent Crude trades above $53.6/b this morning as OPEC members have agreed to extend production cuts, including Saudi Arabia which will reduce output by 1 million barrels per day.

1-year forward prices

Market close data has revealed that the 1-year forward price for commercial gas increased, while commercial electricity moved down, closing at 46.05ppt and £54.65/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 - 06-01-2020

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