Spot power prices have not decreased as much as they were expected to do so earlier in the week as temperatures have been revised lower for next week and wind generation is also set to fall; today's outlook is bullish as a result. Gas prices displayed downward movement on Thursday as demand levels were lower than anticipated and LNG supply was strong with further deliveries expected this month. A cooler weather forecast has pushed prices higher this morning, while Norwegian flows are also marginally lower with further maintenance expected. 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?
Gas contracts displayed losses yesterday as healthy imports from Norway and Russia led to a comfortable system, while the drop in temperatures failed to have much influence on demand levels. Maintenance at the Kollsnes facility in Norway was completed yesterday, helping overall gas flows to increase and three LNG deliveries are expected to arrive in the UK over the next 7 days. Power prices followed the movement of gas and weakened across the curve, although seasonal contracts only displayed minor changes. The Day-Ahead contract decreased due to the usual drop in industrial demand on Fridays and over the weekend.
How did the energy markets open?
A higher demand forecast has supported gas contracts this morning and price increases can be seen across the curve. Norwegian gas flows are also reduced compared to yesterday's strong levels and maintenance may need to take place at some facilities in the coming days. A revision in next week's weather forecast predicts below average temperatures which should result in stronger demand and has pushed power prices higher this morning. Wind generation is also set to fall over the coming days which has provided further support.
1-year forward prices
Market close data has revealed that the 1-year forward price for both commercial gas & commercial electricity increased - closing at 47.28ppt and £44.98/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 prices climbed higher yesterday afternoon due to depleted US stocks but the market is bearish again this morning and Brent has posted a loss of $0.55/b. The on-going battle for market shares remains the main market driver with key oil producers happy to keep prices low.