Spot power prices showed little movement yesterday as wind generation and temperatures are expected to improve slightly, although this rise is thought to be temporary. Gas prices moved down yesterday as demand levels are forecast to decrease and supply levels remain healthy. The UK is currently the exception to the colder temperatures as the weather remains rather mild thus lowering demand. Although BBL flows have decreased and there is currently no output from the UK interconnector. Temperatures are expected to fall towards the end of the month and demand is expected to rise slightly tomorrow resulting in prices taking a slightly bullish turn today. Today's prices can also be found in an easy to read table on our 'current UK energy price' page.
How did the energy markets close?
The gas curve recorded numerous losses yesterday with day-ahead falling by 0.65ppt and Front-Month closing at a 0.50ppt discount. Steady gas flows and a long gas system helped contracts take a downward direction and losses were also observed on the far-curve; Summer-14 registered a 0.20ppt loss and ignored climbing Brent. Power prices failed to take any clear direction yesterday as day-ahead climbed £0.10/MWh higher due to low wind generation and rising demand. Most contracts followed their gas counterparts and moved down; Winter-14 displaying the biggest loss of £0.35/MWh.
How did the energy markets open?
Day-Ahead opened 0.15ppt higher despite a UK gas system which was 18mcm long as the contract took influence from reduced flows via the Bacton BBL pipeline. February-14 and March-14 both opened the session with a small discount, while far-curve prices moved higher. These gains ranged from 0.15ppt for Summer-14 and 0.30ppt for Summer-16, contracts ignored the strengthening British Pound and took direction from stronger Brent. On the power curve Day-Ahead shed £2.35/MWh from its price on the back of an improved wind generation forecast as levels are expected to double tomorrow. The Heysham nuclear power station is also set to return in the coming days which also weighed on the contract. Far-curve prices also moved lower and took direction from APi2 coal which fell by $0.50/tn.
1-year forward prices
Market close data has revealed that the 1-year forward price for both commercial gas & commercial electricity decreased - closing at 66.09ppt and £51.65/MWh, respectively. This can be seen in the graph below.
Note: Brent Crude prices are taken from opening market data, and do not represent the price as it changes throughout the day.
Latest Brent Crude Prices
Brent 1st-nearby prices reached a 2 week high yesterday as they climbed to $108/b on the back of recent IEA and IMF reports which predict a rise in global oil demand this year. However prices fell by $0.38/b later in the session while WTI increased by nearly $1/b, trading at $95.5/b this morning which took the Brent/ WTI spread to -$11.6/b.