Spot power prices weakened yesterday as strong wind levels in the UK have provided a boost to overall supply. Nuclear outages provide some upward pressure today and have pushed some near-curve prices higher but weaker gas should remain the main market driver. Gas prices displayed gains yesterday morning but fell throughout the session due to the healthy supply/ demand picture. Milder temperatures in Europe are expected to last over the weekend, while gas flows remain strong; prices should move down as a result. 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 inched higher yesterday morning as outages at Norwegian pipelines shortened supply which resulted in the UK gas system falling short. However, the supply picture improved in the afternoon and demand levels were not as high as previous days which resulted in bearish movement. Power contracts ended yesterday's session at a discount as strong wind production, milder temperatures and weakening gas assisted the bears. Further downward pressure was provided by weakening Brent which helped to weigh on the far-curve.
How did the energy markets open?
Price-drops were visible across the gas curve this morning with Day-Ahead falling by 0.50ppt on the back of healthy supply and a UK gas system which opened 13mcm long. Overall gas flows displayed an increase with flows via Milford Haven rising to around 12mcm. Seasonal contracts displayed smaller losses despite another decrease in oil prices. Day-Ahead power ignored the usual drop in demand on Fridays and climbed higher as wind production is expected to fall tomorrow and UK temperatures are forecast to be colder. The rest of the curve displayed a clear downward trend with contracts falling by as much as £0.70/MWh.
1-year forward prices
Market close data has revealed that the 1-year forward price for both commercial gas & commercial electricity decreased - closing at 54.13ppt and £49.53/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 tumbled further during yesterday's session and now trade below $65/b. The latest EIA and OPEC reports displayed bearish data while Middle-Eastern supply remains plentiful.