22nd March 2016 | Posted by: Daniel Birkett | Market Analysis

Gas Power
Market Close Market Close
Healthy supply levels and a lower demand forecast helped to weigh on prompt gas contracts yesterday. Gas demand fell by 22mcm and the system was oversupplied throughout the session, with a milder weather outlook and the Easter holidays expected to reduce levels further. The LNG outlook is also comfortable with four deliveries expected to dock in the UK over the next ten days. Power prices followed the movement of gas on Monday and losses were evident across the curve, with little support coming from the oil market. Temperatures are expected to remain mild for the rest of March which also helped to weigh on the curve, although renewable generation is rather weak at present.
Market Close Market Close
The slight drop in temperatures today is thought to be temporary with UK weather reverting back above the seasonal average later in the week and over the Easter holiday. Elsewhere, Norwegian gas flows have been rerouted to Europe which has reduced supply levels in the UK and supported gas prices, however, the UK gas system is balanced as UKCS production is higher. Further out, Brent prices remain stable and has had little effect on contracts. Wind levels are expected to improve at the weekend and temperatures have been revised upwards over Easter which has helped the prompt open unchanged this morning, ignoring bullish movement on the gas curve. However, the rest of the curve has followed gas and posted gains, although some contracts further out have opened flat.

Brent Summary

Brent 1st-nearby prices are generally unchanged from yesterday's open, fluctuating only slightly during the session to trade at around $41.2/b this morning with very little change in terms of fundamentals to pressure the market in either direction.

1-year forward prices

Market close data has revealed that the 1-year forward price for both commercial gas & commercial electricity increased - closing at 30.33ppt and £34.95/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

energy price graph - 22-03-2016