Spot power prices moved higher yesterday afternoon as low wind generation and maintenance at a number of nuclear facilities supported the bulls. Prices are expected to stabilise today as fuel and carbon prices are weakening. Gas prices recorded losses yesterday as demand levels were rather low and LNG supply increased. Supply levels were unchanged this morning and milder weather should result in further price-drops with storage levels also healthy. Today's prices can also be found in an easy to read table on our 'current UK energy price' page.
How did the energy markets close?
Gas prices decreased during Tuesday's sessions with Day-Ahead closing 1.50ppt lower and Front-Month falling by 0.80ppt. Reduced demand levels on the back of mild temperatures helped to weigh on the market, while UK storage levels also stand at 97%. The UK gas system was balanced for most of the day but ended the session 3mcm short. Day-Ahead was the exception to the bearish movement on the power curve yesterday and moved £0.20/MWh lower as weak wind production was forecast for Wednesday. Elsewhere, October-14 recorded a £0.70/MWh loss with some gas-fired power plants expected to return online.
How did the energy markets open?
The UK gas system was 8mcm long at the start of today's session although gas flows are generally unchanged; Day-ahead climbed 0.10ppt higher but was restricted by healthy supply. Two nuclear reactors are set to restart in Japan for the first time since the Fukushima disaster following a successful upgrade, but it is unknown how this will affect Asian LNG demand. Wind generation forecasts remain below 1GW for the rest of the week but levels are expected to improve slightly tomorrow. This increase in renewable generation has helped Day-Ahead open at a £1.25/MWh discount.
1-year forward prices
Market close data has revealed that the 1-year forward price for both commercial gas & commercial electricity decreased - closing at 57.25ppt and £50.15/MWh, respectively. This can be seen in the graph below.
Note: Brent Crude prices are taken from opening market data, and do not represent the price as it changes throughout the day.
Latest Brent Crude Prices
Brent 1st-nearby prices have stabilised below $100/b and reached a new 16-month low of $99.03/b yesterday. In terms of outlook, the situation in Ukraine and Iraq remains relatively calm and this could lead to a further decrease.