Prices moved higher yesterday on the back of reduced nuclear availability and low renewable generation. However, an improvement in supply is expected today which should result in weaker prices later in the session. A short UK gas system and concerns regarding Russian supply led to significant gains yesterday. In terms of today's outlook the current supply picture remains tight and Linepack is under-supplied once again; a further price increase is anticipated. 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 prices initially opened higher yesterday but decreased as the session progressed as a result of improved Langeled flows and an increase in storage withdrawals. Day-ahead was the exception to the bearish movement and climbed 0.50ppt higher, while November-14 fell by 0.40ppt and December-14 closed 0.50ppt lower. Power prices also displayed a downward trend with November-14 the biggest mover with a drop of £0.55/MWh. Day-Ahead also weakened on the back of warmer weather and improved wind generation.
How did the energy markets open?
Gas contracts went up this morning with Day-Ahead adding 1.75ppt to its price due to a short UK gas system. Overall gas flows have improved today but a reduction in Norwegian output is expected due to maintenance at St Fergus. Smaller gains were observed further along the curve with Winter-15 climbing 0.15ppt higher. Day-Ahead power failed to take direction from an improved wind production forecast and increased by £2.00/MWh. The prompt contract was pushed higher as the UK is expected to be more reliant on expensive gas-fired generation in the coming days. Gains were also seen on the far-curve with Q1-15 opening at a £0.90/MWh premium.
1-year forward prices
Market close data has revealed that the 1-year forward price for both commercial gas & commercial electricity recorded a small loss - closing at 58.83ppt and £51.23/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 Prices
Brent-1st nearby prices have rebounded this morning after falling to a two-year low yesterday afternoon. Prices currently trade below $98/b but weak manufacturing data in the US and China should lead to yet another drop in price this afternoon.