Despite yesterday's higher demand and low domestic production, the UK gas system managed to balance out thanks to higher storage withdrawals. We can expect to see today's UK NTS demand climb 11 mm cm higher compared to yesterday, with high storage withdrawals expected this morning. Given the fall in prices we saw yesterday, the on-going drop in storage levels could spark a technical rebound on March 2013 prices today. TTF Endex cal 2014, on the far curve, was also lower yesterday, but overall losses were held up by the resilience in oil prices.
How did the energy markets close?
Day-Ahead gas saw a fall during yesterday's trading (down 0.30ppt), with extensive losses being prevented by a short system that later balanced and outages across several gas plants. Elsewhere on the curve, we saw larger drops, with Front-Month falling 0.50ppt and Front Season down 0.40ppt. These falls were more or less reflective of Brent... which registered a drop during the first half of yesterday's session. In terms of power, yesterday saw Day-Ahead gain £0.80/MWh as temperatures stay below seasonal average. Contracts on the Front Quarter onwards experienced a fall, following the direction of their gas counterparts.
How did the energy markets open?
Gas' Day-Ahead opened up flat this morning, with the rest of the curve not showing much movement at all. Gas flows stayed fairly steady, with the Interconnector dropping slightly and Norwegian flows covering the gap. Ignoring the climbing price of coal, Day-Ahead power dropped exactly £2.00/MWh this morning. Elsewhere, weaker wind generation led to its market share falling back to 8%. We're expecting wind generation to continue falling today and into the weekend.
1-year forward prices
As you can see in the graph below, the 1-year forward prices for business gas and business electricity saw a fall yesterday; dropping to 66.98ppt and £51.28/MWh respectively.
Latest Brent Crude Oil prices
Prices for Brent 1st nearby were slightly up following yesterday's session, while WTI prices dropped a little. Yesterday's macroeconomic environment played out to be neutral, with US equity markets coming in flat. Today's focus points to central bankers' speeches - specifically Mr. Carney on BoE (Bank of England) policy this morning and Mr. Draghi on the ECB (European Central Bank) policy and the Euro this afternoon. Key economic data to look out for includes the German output, US jobless claims and the Bloomberg consumer confidence index. Note: Brent Crude prices are taken from opening market data, and do not represent the price as it changes throughout the day.