Spot power prices were stable yesterday as solar and wind generation levels improved and the demand outlook was comfortable. Temperatures for the next few weeks were revised slightly lower today which has offered some support but weaker gas has resulted in numerous price-drops. Gas prices inched higher yesterday afternoon as an outage at the Kvitebjorn field reduced Norwegian flows which led to an under-supplied UK gas system. An uptick in temperatures tomorrow and improved Norwegian flows, following the return of the Kvitebjorn field has resulted in bearish movement today. 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 increased on Tuesday as the UK gas system fell short following a drop in overall flows, with a halt in Dutch imports and an outage in Norway. Meanwhile, a large LNG delivery is expected to arrive in the UK next week which will significantly boost supply, improving the outlook for this month. Power prices followed the movement of gas yesterday as cooler temperatures and reduced supply provided support. The nuclear plant at Heysham also had its return date pushed back to the 31st of July, assisting the bulls further.
How did the energy markets open?
Warmer weather is set to return to the UK tomorrow which has helped Day-Ahead gas to decrease. The supply picture is also much improved today following the end of maintenance at the Kvitebjorn field in Norway and a scheduled LNG delivery next week; resulting in downward movement across the curve. Power prices displayed mixed movement this morning as temperatures in June were revised down, while weaker gas resulted in some losses. Elsewhere, overall generation levels were improved today with peak wind production expected to reach 3.6GW today, compared to 1GW yesterday.
1-year forward prices
Market close data has revealed that the 1-year forward price for both commercial gas & commercial electricity decreased - closing at 45.70ppt and £44.00/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 have fallen back to Monday's levels as the market remains stable with no real market driver at present, despite global oversupply.