6th March 2018 | Posted by: Daniel Birkett | Market Analysis

Gas Power
Market Close Market Close
Above average temperatures are expected later in the week which will weigh on demand levels, contributing to losses on the near-curve yesterday. The system was also long as demand decreased and pipeline supply improved. Movement further along the curve was generally stable, with support provided by rising coal and oil markets. An improved gas supply outlook and a milder weather forecast for this week resulted in bearish movement at the front of the power curve yesterday, with the prompt recording a strong loss. Far-curve contracts were stable-to-bullish as planned closures at Chinese coal mines resulted in higher prices.
Market Open Market Open
The system remains oversupplied this morning which has helped to restrict any upward movement on the near-curve. LDZ demand is 10mcm lower than yesterday, while CCGT demand has increased by 4mcm. In terms of supply, storage sites are withdrawing at a higher rate as BBL flows have fallen by 16mcm. Meanwhile, oil prices have posted further gains, supporting prices at the back of the curve. Reduced demand levels, caused by milder weather has contributed to some losses at the front of the curve this morning, although a weaker wind forecast for tomorrow has helped the prompt move higher. Further out, the coal market remains bullish and Brent displays another increase, resulting in some minor gains.

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

Brent Summary

Brent displays further gains this morning and now trades around $65.5/b; bullish pressure has been provided by a positive IEA report which points to a healthy demand outlook until 2023.

1-year forward prices

Market close data has revealed that the 1-year forward price for both commercial gas & commercial electricity increased – closing at 46.90ppt and £47.30/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 - 06-03-2018