16th April 2018 | Posted by: Daniel Birkett | Market Analysis

Gas Power
Market Close Market Close
The prompt climbed higher on Friday following a drop in supply, although a warmer weather outlook for the weekend and this week helped to limit upward movement on the rest of the near-curve. Meanwhile, sentiment at the back of the curve was generally bullish with support provided by stronger oil and coal prices. Weak renewable generation and a drop in gas supply helped the prompt rally higher on Friday, with the rest of the near-curve also displaying gains despite the expectations of warm weather this week. Tensions in the Middle East caused upward movement on the oil market, while coal continued to display a bullish trend, helping far-curve contracts move higher.
Market Open Market Open
The system has opened 18mcm short despite a significant drop in demand, with LDZ consumption falling by 30mcm day-on-day and improved wind levels seeing CCGT demand decrease by 10mcm. However, a number of outages in Europe have reduced flows into the UK, with LNG send-outs also lower this morning with no deliveries on the horizon. As a result, prices are stable-to-bullish, with a drop in oil limiting upward movement further out. Wind and solar generation have ramped up today, reducing the UK’s reliance on more expensive gas-fired power. Healthy renewable levels are also expected tomorrow, with warm weather forecast across the UK from Wednesday; resulting in a loss for the prompt, which filtered through to the rest of the near-curve. Further out, prices are more resilient due to rising coal and carbon markets.

For a breakdown of the current generation mix visit our Power Generation Insights page.

Brent Summary

Brent 1st-nearby prices have dropped by $0.60/b this morning with high US production continuing to dictate the market, while tensions in Syria have eased somewhat.

1-year forward prices

Market close data has revealed that the 1-year forward price for both commercial gas & commercial electricity decreased slightly – closing at 49.15ppt and £49.59/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

energy price graph - 16-04-2018

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