|Gas prices inched higher on Monday despite weakening Brent and a long UK gas system, with a colder weather outlook and stronger coal the main market drivers. Output at South Hook temporarily dropped to zero in the afternoon due to an outage, with LNG supply expected to remain weak over the next fortnight due to a lack of deliveries.
|The majority of contracts were bullish yesterday with colder temperatures and rising gas helping to drive prices higher. Coal prices also increased during the session and offset falling Brent, while an expected rise in wind generation today helped the prompt record a loss.
|Rising coal prices continue to offer support on the far gas curve this morning, while a higher demand forecast has helped prompt contracts to open at a premium. The gas system is balanced this morning but an expected drop in wind levels tomorrow should see a rise in gas-fired power generation, with colder weather also pushing residential demand higher.
|The power curve displays mixed movement this morning with a weaker renewable generation forecast contributing to gains at the front of the curve. Rising fuel prices are also a bullish factor but movement on the capacity market has eased supply concerns this winter and pressured down corresponding contracts.
Brent 1st-nearby prices display a small gain this morning and currently trade just below $52/b. The US Dollar has weakened slightly since hitting a 7-month high which has helped to support prices, cancelling out the effects of a rising rig count.
1-year forward prices
Market close data has revealed that the 1-year forward price for commercial gas moved higher, while commercial electricity decreased - closing at 46.40ppt and £47.39/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
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