10th April 2018 | Market Analysis

Gas Power
Market Close Market Close
Bulls came back to the fore on Monday despite an upwards revision in temperature forecasts pointing to warm weather next week. A tight UK Gas system due to step up in gas demand from CCGTs on the back of very low wind power generation combined with two unplanned outages in Norway. Spot prices inched marginally down yesterday as wind production is set to gain strength today in most NWE Countries. Hydro run of river production in France increased as well, while water reserves stabilized below last year’s levels. Nuclear availability remained low. On the far curve, year-ahead prices rose further with a sustained energy complex. Brent prices surged, coal prices gained nearly 2 USD close-to-close. EUA prices rebounded further.
Market Open Market Open
A further increase in oil and coal prices could continue to support gas prices on the curve today while continental spot prices could be supported by an ongoing planned outage at the Emden terminal which curbs flows from Norway. As a consequence, Norwegian flows are rerouted to the UK, dragging the British system into oversupply which could weigh on the NBP Prompt. Temperature forecasts for May were revised lower in the latest forecast for France but we would take it very cautiously as it would come only after a very mild pattern until the end of April. This should therefore not have too much impact on the market prices but this could give a bullish bias. The immediate view is still bearish thanks to the lower demand in the short-term. On the far curve, market prices will likely test the December’s resistance today and could perhaps break above.

For a breakdown of the current generation mix visit our Power Generation Insights page.

Brent Summary

The easing in trade tensions, as well as the slight rebound in the USD pushed oil prices higher. It is difficult nevertheless to explain the extent of this recovery.

1-year forward prices

Market close data has revealed that the 1-year forward price for commercial gas has increased and & commercial electricity decreased – closing at 47.45ppt and £48.08/MWh, respectively.

Today’s prices can also be found in an easy to read table on our ‘current UK energy price' page.

'Click to enlarge graph’

Energy Price Graph - 10-04-2018

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