|A warmer weather outlook continued to pressure down gas contracts yesterday as demand levels will decline over the next couple of weeks; a stronger Pound also helped to weigh on prices. The bearish movement was more evident at the front of the curve as losses further out were limited by a rebound in oil contacts.
|Movement on the power curve was largely bearish yesterday with a rebound in the Pound helping to weigh on contracts. Losses on the gas market also transferred to their power counterparts and a milder weather forecast for next week continued to apply downward pressure.
|The majority of contracts display a technical rebound this morning with losses on the prompt also limited by a weaker supply outlook for Friday. Demand levels in the UK are expected to be 20% above the seasonal norm tomorrow and the system is undersupplied due to weaker UKCS production. Next week’s wind forecast is also weak which will lead to a rise in CCGT generation, offsetting the effects of milder temperatures.
|Power contracts have increased this morning with direction coming from strengthening gas, coal and oil. The prompt has been supported by a cold weather forecast for tomorrow, while low wind levels are also expected next week, with the losses filtering through to the rest of the near curve.
Brent 1st-nearby prices have rebounded overnight and are back around $55.5/b, recovering losses recorded earlier in the week. Fundamentals are generally unchanged as the market awaits accurate data in regards to OPEC output figures.
1-year forward prices
Market close data has revealed that the 1-year forward price for both commercial gas & commercial electricity increased – closing at 48.03ppt and £46.47/MWh, respectively.
Today’s prices can also be found in an easy to read table on or ‘current UK energy price' page.
Click graph to enlarge
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