|Gas prices moved down yesterday following an upward revision in temperatures for the middle of next week and the remainder of March. The system was also long throughout the session despite weak storage withdrawals and above average residential demand. Further out, a late rally in oil prices and a rebound on the coal market restricted bearish movement.
|Wind generation was forecast to remain above 10GW today, weighing on the prompt, while the rest of the near-curve decreased on the back of a milder weather outlook from next Wednesday onwards. An increase in Brent and coal helped to limit losses on the far-curve but the overall trend remained bearish.
|Cold temperatures are expected over the weekend and the start of next week but the outlook for the rest of March continues to be revised, with temperatures set to revert back to the seasonal norm. This weaker demand forecast continues to weigh on contracts at the front of the gas curve, but stronger fuel markets provide resistance at the back of the curve.
|Fundamentals are largely unchanged today, although wind levels are expected to weaken over the weekend, helping the prompt climb higher. The impending cold spell is not expected to linger, while today’s healthy wind output has reduced CCGT demand. On other markets, Brent displays a rebound, while coal continues to recover.
For a breakdown of the current generation mix visit our Power Generation Insights page.
Brent 1st-nearby prices increased yesterday following a bearish open as OPEC announced they expected oil consumption to increase this year; Brent currently trades close to $65.2/b.
1-year forward prices
Market close data has revealed that the 1-year forward price for both commercial gas & commercial electricity decreased – closing at 48.95ppt and £48.43/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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