|A short system helped near-curve gas contracts climb higher on Wednesday, although an expected surge in wind power was expected overnight, weighing on the prompt. The closure of the IUK pipeline led to a halt in exports but outages in the UKCS limited supply levels. Further out, the majority of prices displayed gains with direction coming from increases on coal and oil markets.
|The coal market continued to act as the main market driver for power prices yesterday, with an on-going dispute in South Africa between workers and Eskom which could severely impact production and exports. Support was also provided by stronger gas contracts, while Brent also displayed a rebound later in the session.
|Outages in Norway continue to provide bullish pressure at the front of the gas curve this morning, despite a long system. Strong wind levels have reduced CCGT demand but these levels are expected to drop sharply tomorrow, contributing to gains on the prompt. Contracts at the back of the curve have also been lifted by high coal prices and a rebound on the oil market.
|Coal remains around $90/tn today and seems to be struggling to jump beyond its current levels despite concerns regarding South African supply. Power prices are still rather bullish as wind levels are expected to drop significantly tomorrow and gas prices remain supportive.
For a breakdown of the current generation mix visit our Power Generation Insights page.
Brent 1st-nearby prices decreased further yesterday but found support in the afternoon following the release of the latest EIA report; Brent trades around $75.3/b this morning.
1-year forward prices
Market close data has revealed that the 1-year forward price for both commercial gas & commercial electricity increased – closing at 57.63ppt and £55.88/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
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