18th February 2016 | Posted by: Daniel Birkett | Market Analysis

Gas Power
Market Close Market Close
Gas prices rallied higher yesterday afternoon following an increase in Brent, with some optimism in regards to potential cuts to oil production. The UK gas system remained rather tight as demand levels were 17% above the seasonal norm which also offered support to near-curve contracts. A milder weather forecast for next week helped to weigh on contracts at the start of Wednesday's session, with the prompt closing at a discount due to an expected drop in consumption levels today. However, bullish movement was observed further along the curve as contracts followed rising gas and oil.
Market Open Market Open
The supply/ demand outlook is generally unchanged this morning as UKCS production is expected to increase later in the session but this will likely result in reduced storage withdrawals. Temperatures are forecast to turn slightly milder next week but this has done little to curb gains on the near-curve, while rising Brent has supported contracts further out. Power prices have been pushed higher by their stronger gas counterparts and a rise in Brent this morning. Elsewhere, around 7GW of coal-fired generation capacity is set to go offline at the end of March, which has offered additional support to the far-curve.

Brent Summary

Brent 1st-nearby prices displayed a rebound yesterday afternoon following a bearish start to the session as the market remains volatile on the back of a meeting between OPEC members; Brent currently trades around $34.4/b.

1-year forward prices

Market close data has revealed that the 1-year forward price for both commercial gas & commercial electricity increased - closing at 30.63ppt and £34.65/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 - 18-02-2016