|The UK gas system remained short yesterday as an increase in gas-fired power generation and higher exports to Belgium lifted demand levels. Weaker UKCS and Norwegian flows also reduced supply levels, as did a drop in LNG send-outs; this helped towards gains on the near-curve. Further out, winter contracts displayed some decreases following strong upward movement on Friday.
|The majority of power contracts moved higher on Tuesday as warmer temperatures resulted in an increase in cooling demand, with stronger gas also a bullish factor. Wind generation was expected to rise significantly today which limited increases on the prompt, while a fall in coal and Brent restricted gains on the far-curve.
|Higher UKCS output has resulted in a long UK gas system this morning with a further improvement expected later in the session when the J-Area field returns online, following an outage. Lower renewable generation could contribute to a rise in gas-fired power generation tomorrow, supporting the prompt, while a weaker Pound has also led to gains on the rest of the near-curve. Further out, a drop in coal and oil prices restricted some of the upward movement.
|Wind generation is expected to remain healthy until the weekend and temperatures are forecast to fall closer to the seasonal norm; this could result in some downward movement on the prompt this afternoon, following a slightly bullish opening. Elsewhere, coal and oil contracts display small losses which has helped to stabilise contracts on the far-curve.
Brent 1st-nearby prices are generally stable this morning, shedding around $0.20/b since Tuesday's opening with no major changes to fundamentals or the global economy.
1-year forward prices
Market close data has revealed that the 1-year forward price for both commercial gas & commercial electricity increased slightly - closing at 44.22ppt and £43.10/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