9th November 2016 | Posted by: Daniel Birkett | Market Analysis

Gas Power
Market Close Market Close
Gas prices moved down yesterday on the back of well-supplied gas systems across Europe and a milder weather forecast for the coming days. Imports into the UK via the BBL and IUK pipelines increased and more than offset the rise in residential demand, weighing on prices at the front of the curve. Elsewhere, the French national grid released details regarding its winter supply/ demand outlook, although no surprising information was revealed and it had little effect on the market. Power prices decreased yesterday but failed to erase the strong gains which were recorded on Monday. Milder temperatures are expected in the second half of the month, while wind generation is set to increase next week. APi2 coal also recorded a loss which was an additional factor behind bearish movement on the far-curve.
Market Open Market Open
Demand levels have decreased this morning and the UK gas system remains long despite a drop in imports via the IUK pipeline; bullish movement on the prompt was restricted on the back of this comfortable supply picture. Further out, a drop in coal and oil prices has provided bearish pressure and contracts could move down in the afternoon. Contracts at the front of the power curve have opened at a discount this morning with a drop in oil contracts and an improved supply/ demand outlook for the coming weeks helping to drive down prices. Meanwhile, movement at the back of the curve is still rather bullish with winter supply concerns supporting seasonal contracts.

Brent Summary

The announcement of Donald Trump as the US President has resulted in another major political market driver this year, with the first being the Brexit vote back in June. As a result Brent 1st-nearby prices have been volatile, displaying losses last night before making slight recovery this morning to trade at around $45.5/b.

1-year forward prices

Market close data has revealed that the 1-year forward price for commercial gas increased, while commercial electricity was unchanged - closing at 45.79ppt and £47.12/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 - 09-11-2016

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