18th January 2021 | Posted by: Daniel Birkett | Market Analysis

Gas Power
Market Close Market Close
Gas prices eased down towards the end of last week as temperatures forecasts for the next fortnight were revised higher. Improved wind generation was also forecast for the weekend and the start of this week, reducing demand. Power followed gas and displayed losses across the curve, as supply/ demand levels are set to become more comfortable for the remainder of January. Commodities also failed to offer much direction further out and most contracts closed at a discount.
Market Open Market Open
The UK gas system is oversupplied this morning as a significant rise in wind generation has reduced demand for gas-fired power. Meanwhile, temperatures are set to turn milder over the coming days, taking further pressure off the system. Prices have moved down across the near curve as a result, with a drop in commodities also weighing on the far curve. Power contracts trade down this morning on the back of a healthier gas system, a mild weather outlook and improved renewable generation. Further out, prices have also followed a drop in coal and oil as the week starts on a bearish note.

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

Brent Summary

Brent Crude has dropped to around $55.1/b as the impact of global lockdowns is beginning to show in terms of oil demand forecasts, although OPEC production cuts continue to provide support.

1-year forward prices

Market close data has revealed that the 1-year forward price for both commercial gas & commercial electricity moved down, closing at 45.30ppt and £53.68/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 - 18-01-2021

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