Yesterday's high demand for gas, coupled with a fall in domestic production led to a tightening in the UK gas balance. As a result, high imports from the Netherlands and Belgium were required to balance the system.
How did the markets close?
After predictions of heavy and disruptive snowfall across the UK, prompt gas prices saw a rise yesterday. Day-Ahead prices reached 72.45ppt and Front-Month Brent saw a small rise; staying around the $110.5/bbl mark during the day. In terms of power, the Day-Ahead price dropped and closed at £54.00/MWh - this is thought to be as a result of increased forecasted wind generation. Seasonal prices went in the opposite direction, though, with S-13 moving up to £48.95/MWh at close. The main driver of this was considered to be Brent - which had a positive day following good economic data from China.
How did the markets open?
This morning saw a fall in prompt gas prices, with the system well-supplied after an increase in flows through the Bacton BBL pipeline and Bacton Interconnector. Day-Ahead prices dropped almost 2ppt, opening at 70.5ppt this morning. After positive economic news from China, there was an increase in commodity prices - this, in turn, gave power prices a push towards the back of the curve. The fall in expected wind output did very little, as Day-Ahead prices fell just £0.05/MWh; opening up at £53.95/MWh.
1-year forward prices
Market close data from yesterday revealed that the 1-year forward prices for commercial gas and power rose slightly. This can be seen in the graph below.
Latest Brent Crude Oil price
Strong US economic data and news about the raid on an Algerian gas facility supported Brent 1st nearby prices yesterday. The turmoil between central government and the Kurdistan region doesn't seem to be easing in Iraq, which could affect prices. Some support from the Chinese economic data is expected while consumer confidence in the US could weaken enthusiasm on financial markets. Note: Brent Crude prices are taken from opening market data, and do not represent the price as it changes throughout the day.