Spot prices went up and look to be bouncing back after their low levels last week, although the market is still currently in good supply. Weak prompt power contracts have led to a decrease in the market, this is expected to continue but shouldn't fall too drastically providing clean coal costs become stable.
How did the energy markets close?
The gas system was short at closing due to Langeled flows dropping under 25mcm, maintenance at Langeled was supposed to take place over the weekend but this has been rescheduled for the 21st May which could withhold potential flows of 50mcm. Most of the gas-curve managed to drop in price despite the issues at Langeled with falling Brent influencing prices. Day-Ahead power was the only contract to make a gain, going up by £0.45/MWh as demand is expected to increase this week. Day-Ahead Power made a more substantial gain to Day-Ahead Gas and the spark spread has widened to £2/MWh. Front-Month fell to £47.35/MWh as a consequence of lower coal and carbon prices.
How did the energy markets open?
There was an outage at the Norwegian Troll A field which helped Day-Ahead and Within-Day to make gains, despite this the system managed to open long. Weather temperatures are expected to remain below the average for this time of year but a positive LNG Outlook will limit any gains made by Front-Month. The Holford storage facility began withdrawing 18mcm to help the system recover from the low Langeled flows which currently stand at 27mcm. There was mixed direction on the power curve with Day-Ahead falling by £0.35/MWh and the front two months going up by £0.15MWh. High wind availability is expected for this week with peak wind generation forecast to hit 4.5GW. CCGT generation was reduced due to a delayed restart at the Peterhead gas fired plant but it is expected to return online tomorrow.
1-year forward prices
Market close data has revealed that the 1-year forward price for commercial gas & commercial electricity both made losses - closing at 66.84ppt and £51.35/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 Oil prices
Brent 1st-nearby prices fell by around 3 $/b intraday on Friday but have made significant gains today to close only 0.56 $/b down. The US Dollar has become stronger over the last week and this is thought to be the main factor in the recent losses.
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