The UK gas system was tightened yesterday, with higher withdrawals needed as on-going lower domestic production and higher demand took control. This move supported NBP spot and near curve price. Although UK NTS demand is a little lower this morning (compared to yesterday), the system is expected to fall short due to another drop in domestic production. We believe this could push March 2013 prices higher again today. Turning to power, we're expecting a supportive spot fundamental picture for the next week - with a drop in temperatures, a drop in French nuclear availability and limited wind power all contributing to this.
How did the energy markets close?
Thursday saw Front contracts pulling away from the rest of the curve; closing higher thanks to a short-supplied UK gas system. Further out on the curve, contracts refused to follow Brent movements and stayed within a fairly tight intra-day range. Power picked up throughout the session, as Day-Ahead recovered from opening £2.00/MWh down to reach £51.10/MWh.
How did the energy markets open?
NBP gas prices mirrored the gains seen for oil as Front-Month Brent reached $117.65/bbl following yesterday's ECB meeting encouraging a more optimistic outlook on the Eurozone. Power's Day-Ahead jumped £1.30/MWh overnight to match up with the usual Monday demand premium; ignoring lower wind availability forecasted over the next few days.
1-year forward prices
As you can see in the graph below, both 1-year forward prices for business gas and business electricity saw a very slight rise yesterday.
Latest Brent Crude Oil prices
We saw Brent 1st nearby top a new high for this year yesterday - hitting $117.83/bbl. This high eased into the afternoon after the ECB meeting we mentioned, but is now picking back up and has hit $117.94/bbl. Today, we'll be focusing on US trade data and remaining cautious about positivity surrounding financial markets. Note: Brent Crude prices are taken from opening market data, and do not represent the price as it changes throughout the day.