7th January 2015 | Posted by: Daniel Birkett | Market Analysis

Spot power prices continue to show a bearish outlook, at least for the short-term despite healthy wind generation levels. Further losses are expected as milder weather is expected later in the week and over the weekend which will reduce demand levels. Gas prices displayed further losses yesterday despite an unscheduled outage in Norway which reduced supply. Fundamentals remain bearish this morning with milder weather expected until the middle of the month and comfortable European supply should lead to more downward movement. 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?

Gas prices continued on a downward trend yesterday and an outage in Norway failed to offer any support to the curve as LNG supply was strong. Meanwhile, another drop in the price of oil helped contracts further along the curve to decrease. Power prices followed weaker gas and the majority of contracts closed at a discount as low demand dictated the market. Falling carbon prices helped seasonal contracts shed from their price, while a gas-fired power plant also had its return date delayed.

How did the energy markets open?

Further losses were observed on the gas curve this morning as temperatures are set to remain mild for the next couple of weeks which should result in lower demand. The UK gas system opened 15mcm long as overall gas flows increased by 10mcm day-on-day. Power contracts decreased this morning with Day-Ahead opening at a £2.45/MWh discount as wind generation is set to rise above 7.5GW for the remainder of the week. A slight rebound in the price of coal and oil helped to provide some support to the far-curve, however, numerous losses were still observed.

1-year forward prices

Market close data has revealed that the 1-year forward price for both commercial gas & commercial electricity decreased - closing at 45.58ppt and £44.45/MWh, respectively. This can be seen in the graph below.

  energy prices

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 Prices

Brent 1st-nearby and WTI prices both fell by $2/b yesterday and edged closer to $50/b, however, a slight rebound of $1.59/b occurred overnight; Brent currently trades at   $53.11/b.