A brief outage at the Rough storage facility provided a little support to NBP spot gas prices yesterday, with further support coming from forecasts of higher demand from today onwards. Today's UK NTS demand should be greater than yesterday's level. However, with the long UK system seen this morning, it's clear that supply will remain comfortable. This could lead to a drop in March 2013 prices throughout the session. After a cold upcoming weekend, temperatures could be warmer next week - so we aren't expecting many changes to power's spot markets in the next few days. In terms of supply, nuclear and lignite production in Germany should remain stable (as should renewable energy production).
How did the energy markets close?
Yesterday's gas prices provided mixed sentiment - with Front Month dropping 0.20ppt and Day-Ahead rising by 0.05ppt. Despite opening fairly balanced, the gas system operated long for the majority of the day before returning to stability. There was also a lack of strong sentiment in power prices, with Front Month and S13 shedding just £0.25/MWh and £0.15/MWh respectively. Even the restarts of several coal-fired plants (including Cottam) didn't seem to impact the prompt.
How did the energy markets open?
This morning's market opened to strong gas flows and increased storage withdrawals; bringing pressure to the prompt and near curve. There were flows of 18mcm from storage facility Holdford, after several days of very little. Prices out on the far curve followed recent gains seen in Brent. In terms of power, EUA allowances weighed down the curve this morning, as EU parliament met yesterday for a vote on reviving the Emissions Trading Scheme. This decision, however, is still in doubt. Generation of wind increased over 17GWh, which dragged Day-Ahead's price down by nearly £1.00/MWh.
1-year forward prices
Based on data from last night's market close, we saw the 1-year forward price for business electricity drop a little to £51.58/MWh, while the 1-year forward price for business gas went the opposite way - climbing to 67.33ppt. These changes are displayed in the graph below.
Latest Brent Crude Oil prices
Yesterday saw a drop in Brent 1st-nearby prices, which fell below the $117/bbl mark but rebounded to close at $117.52/bbl. Today's attention turns to the API weekly report (released this evening), with the EIA report postponed until tomorrow. Note: Brent Crude prices are taken from opening market data, and do not represent the price as it changes throughout the day.