Spot power prices were lower by Friday's close on the back of a stronger renewable generation forecast. However, prices have strengthened this morning due to a rise in demand following lower temperatures across Europe; stronger carbon contracts have also provided some bullish pressure. Gas prices initially opened lower on Friday but increased concerns regarding Russian supply into Europe helped to strengthen prices in the afternoon. Temperatures in the UK are expected to drop this week and combined with the on-going maintenance at a number of gas fields, prices have taken a bullish turn. 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?
Seasonal gas prices took direction from Russian supply fears on Friday with Winter-14 adding 1.50ppt to its price. Day-ahead fell by 0.15ppt and was influenced by healthy storage levels. Renewable generation was also forecast to improve this week and should reduce the need for expensive gas-fired generation. Power contracts also moved higher on Friday with Winter-14 rising by £1.00/MWh. Meanwhile, strong wind levels provided support to near-curve contracts and these levels are expected to be maintained for most of this week.
How did the energy markets open?
Gas prices continued on their bullish trend this morning as Day-Ahead opened at a 1.65ppt premium. Despite a drop in overall gas flows the UK gas system opened long and 3 LNG deliveries are expected to arrive this week. Upward movement was displayed across the curve with Front-Season rising by 1.30ppt. Day-Ahead power was the only contract to record a loss this morning, opening at a £0.55/MWh discount. Wind generation increased significantly and made up 13% of the generation mix this morning which weighed on some near-curve contracts.
1-year forward prices
Market close data has revealed that the 1-year forward price for both commercial gas & commercial electricity climbed higher- closing at 59.93ppt and £51.15/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 climbed to $106.85/b on Friday but have fallen to around $105/b this morning as tensions in Iraq have calmed for the time being; WTI remains below $98/b.