|Winter contracts displayed a significant increase on Friday as it was announced that the Rough storage facility will remain offline until March 2017 following a lengthy inspection. Rough accounts for 70% of the UK's storage capacity and the majority of the nation's back-up supply will now come in the form of more expensive imports from Europe. The lack of storage injections will result in a long system with surplus supply exported to Belgium via the IUK pipeline.
|Power contracts mirrored movement on the gas market and displayed a bullish trend at the end of last week. The effects of Rough's long-term closure transferred to power prices with rising oil and coal also a supporting factor. In terms of short-term fundamentals, temperatures are expected to rise above the seasonal norm this week which could increase cooling demand, while wind generation remains comfortable.
|Most prices are expected to correct downwards today following strong gains on Friday. However, a decrease in Norwegian flows and lower LNG send-outs has offered support to the prompt at the start of the session. A 9mcm drop in demand, following a rise in temperatures should result in losses later in the session, although stronger Brent will limit bearish movement on the far-curve.
|The majority of power contracts have added to their price again this morning with the effects of the Rough's closure continuing to drive energy markets. Healthy wind generation has helped to restrict upward movement on the prompt but warmer temperatures should lift demand levels. Meanwhile, coal and Brent contracts have posted gains which has helped to lift far-curve prices.
Brent 1st-nearby prices are on the rise and currently trade above $47.7/b with positive reports in regards to US oil production and tensions in Turkey providing support to the market.
1-year forward prices
Market close data has revealed that the 1-year forward price for both commercial gas & commercial electricity increased significantly - closing at 44.00ppt and £44.77/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