12th January 2017 | Posted by: Daniel Birkett | Market Analysis

Gas Power
Market Close Market Close
Despite a mild weather outlook for the next week or so, extremely cold temperatures are set to hit Europe later in the month, leading to a surge in demand. Weaker wind levels will also increase the UK's reliance on CCGT generation, with rising fuel prices also assisting the bulls during yesterday's session. An expected rise in demand resulted in stronger power contracts on Wednesday with most contracts following their gas counterparts. Oil prices turned bullish in the afternoon which helped contracts increase further, while supply issues in France were also a factor.
Market Open Market Open
Gas contracts have added to their price this morning as the cold weather forecast continues to provide upward pressure as demand levels will rise significantly. An increase in oil and coal prices has also supported some contracts, but a reasonably bearish supply outlook for the rest of the week has limited the gains at the front of the curve. Power prices display further gains this morning as rising gas and cold temperatures continue to act as the main market drivers. Upward movement on the French market, on the back of lower nuclear availability has transferred to the UK power curve, while rising Brent and coal markets are also supportive.

Brent Summary

Brent 1st-nearby prices have increased this morning and trade close to $55.6/b with support coming from a weakening Dollar and reports of production cuts in Saudi Arabia.

1-year forward prices

Market close data has revealed that the 1-year forward price for both commercial gas & commercial electricity increased - closing at 49.75ppt and £48.80/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 - 12-01-2017

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