|Gas prices weakened on Wednesday despite a sharp rise in demand levels as milder temperatures are expected to return to the UK before the weekend. An increase in wind levels will also reduce the nation's reliance of gas-fired generation, lowering demand further. The falling oil market also applied downward pressure on contracts on the far-curve.
|Power contracts posted losses yesterday and tracked the movement of gas, with additional direction coming from an expected rise in temperatures. Day-Ahead displayed a significant loss with wind generation expected to ramp up today, while weaker oil and fuel pressured down the far-curve.
|Gas demand is expected to fall by 16mcm today as a rise in wind production has resulted in a drop in gas-fired power generation. Temperatures are also expected to be milder for the rest of the month and supply levels are comfortable despite a slight drop in storage withdrawals; price-drops can be observed across the gas-curve as a result.
|Temperatures over February and March are forecast to be above average as it stands which has led to further downward movement on the power curve. Meanwhile, peak wind generation has climbed to around 5GW and is expected to maintain these levels tomorrow, resulting in another sizeable loss on the prompt.
Brent 1st-nearby prices display another drop this morning as global oversupply fears continue to weigh on the market, with further impetus coming from slow economic movement in China.
1-year forward prices
Market close data has revealed that the 1-year forward price for both commercial gas & commercial electricity decreased - closing at 29.35ppt and £33.35/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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