|A sharp drop in demand helped near-curve prices move down yesterday, with above average temperatures expected to continue over the next few days. However, an extension to the outage at Kollsnes limited any bearish movement, while oil prices rebounded following the release of the EIA report, offering support to prices at the back of the curve.
|Healthy renewable generation and weak demand helped towards losses at the front of the gas curve yesterday, although a sharp drop in wind levels was forecast today, helping the prompt record a strong increase. Meanwhile, a late rally in oil prices transferred to contracts at the back of the curve.
|Gas prices have increased this morning despite a long system, with an expected drop in temperatures next week and a bullish oil market contributing to the gains. Demand remains 53mcm below the seasonal average due to warm weather but the outage at Kollsnes continues to limit flows into the UK.
|Wind levels are expected to improve slightly tomorrow, resulting in a small loss on the prompt. The rest of the curve has followed the gas market, with direction coming from a cooler weather forecast for next week and upward movement on fuel markets.
For a breakdown of the current generation mix visit our Power Generation Insights page.
Brent 1st-nearby prices display a significant increase this morning and have climbed above $74/b following the release of a bullish EIA report. Comments made in Saudi Arabia also hinted towards further production cuts, helping oil prices reach their highest level since the end of 2014.
1-year forward prices
Market close data has revealed that the 1-year forward price for both commercial gas & commercial electricity moved higher – closing at 49.60ppt and £49.83/MWh, respectively.
Today’s prices can also be found in an easy to read table on our ‘current UK energy price' page.
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