22nd May 2020 | Posted by: Daniel Birkett | Market Analysis

Gas Power
Market Close Market Close
Gas prices displayed strong losses yesterday, with the largest decreases displayed at the front of the curve. A weak demand forecast for the bank holiday and an expected drop in gas-fired power demand contributed to the bearish sentiment. Power prices followed gas yesterday and traded down, with high wind output also expected today, weighing on the prompt. Demand levels remained low with a further drop expected over the bank holiday weekend.
Market Open Market Open
The UK gas system is oversupplied this morning as strong wind levels have reduced the need for gas-fired power. Oil and carbon markets have offered resistance but the overall energy complex remains weak. Fresh political tension in Hong Kong has also pressured down global financial markets. A rise in carbon has helped to lift power contracts this morning which have ignored weaker coal and gas. Wind levels are very high this morning and the demand outlook remains low, helping to cap gains at the front of the curve.

For a breakdown of the current generation mix visit our Power Generation Insights page.

Brent Summary

Brent 1st-nearby prices trade above $36/b this morning but have been stopped in their tracks by events in Hong Kong, as China plans to impose new security laws which have been met by protests.

1-year forward prices

Market close data has revealed that the 1-year forward price for both commercial gas & commercial electricity decreased – closing at 29.60ppt and £39.45/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 - 22-05-2020

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