Spot power prices continue to display a bearish trend with weaker gas and oil two influencing factors. A warmer weather outlook is expected to result in further losses today, assisted by ample renewables. Gas prices inched lower yesterday as supply levels were healthy following an increase in Norwegian imports. Prices have dropped further this morning with lower storage injections and warmer weather expected next week. 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?
Day-Ahead gas decreased yesterday and opened the session just below £42/MWh on the back of improved supply and stable demand. Downward movement was evident across the near-curve as a balanced system and improved production in Norway weighed on contracts. Price-drops were also displayed further along the curve with direction coming from weaker oil. The majority of near-curve power contracts moved down yesterday and followed their gas counterparts, although the losses were generally minor. The prompt shed from its price as a result of a stronger renewable generation forecast and the usual drop in demand on Fridays. Further out, stronger coal prices provided some resistance to the bears but this was countered by falling Brent.
How did the energy markets open?
Most gas prices have recorded losses this morning as storage injections at the Rough storage facility are expected to be reduced over the weekend and the start of next week. However, maintenance at the Kollsnes processing facility in Norway is expected to reduce flows by 40mcm, supporting the Front-Month contract. Power prices have tracked the movement of gas once again, with weaker oil providing additional bearish pressure on the far-curve. In other news, slightly warmer temperatures are expected to hit the UK next week which should reduce demand levels and improve solar production.
1-year forward prices
Market close data has revealed that the 1-year forward price for both commercial gas & commercial electricity decreased - closing at 42.60ppt and £42.90/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 Price
Brent 1st-nearby price have plummeted again this morning and now trade below $49/b with no obvious bullish factors able to offset the concerns regarding oversupply.