23rd July 2013 | Posted by: Daniel Birkett | Market Analysis

Prices are expected to rise slightly over the coming days but these gains will be limited as spot prices and clean gas prices are around the same level. The UK gas system was well balanced yesterday as Langeled flows improved which countered the drop in BBL flows. Demand was also lower yesterday but this is expected to rise today which should help prices to increase. 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?

Gas contracts opened yesterday's session higher but Day-Ahead went on to shed 0.60ppt from its price, closing at 65.05ppt despite a shorter system and slightly cooler temperatures. Further along the curve contracts displayed mixed movement with August-13 and September-13 adding 0.10ppt to their price while other contracts lost around 0.40ppt. Flows via the BBL pipeline saw a slight decline but the Theddlethorpe facility is running at full capacity. Seasonal contracts were also bullish on the back of weakening Brent prices. Day-Ahead power took a different direction to gas and rose by £0.20/MWh as demand was 1.5GW higher than predicted. The restart date of two 500MW nuclear plants was pushed back today too which also helped contracts make gains. There was varied movement on the rest of the curve with seasonal contracts making losses and Winter-13 dropping by £0.15/MWh.

How did the energy markets open?

Prompt and near-curve prices made gains this morning with Day-Ahead rising by 0.55ppt and Front-Month adding 0.20ppt. Linepack opened 10mcm short and temperatures are forecast to be cooler in the next few days which were the main influences on prices. LNG flows opened the session at 19mcm and other pipelines also so increased flows except BBL which saw flows fall to 4mcm. Exports from the UK to the rest of Europe are at 17mcm at present which is quite low, as this time last year exports were around 30mcm. Day-Ahead made a significant gain of £1.00/MWh as the bulls took control of the power curve with peak demand expected to rise to over 40GW today. Wind generation also decreased by around 50% and holds 1% of the fuel mix while the rest of the curve also saw gains but none higher than £0.20/MWh.

1-year forward prices

Market close data has revealed that the 1-year forward price for both commercial gas & commercial electricity made a loss - closing at 68.40ppt and £51.80/MWh, respectively. This can be seen in the graph below.

Energy Market Analysis

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 Oil prices

Brent prices displayed little movement yesterday while the Brent/ WTI spread fell from 0.1 $/b to -1.64 $/b; gasoline and gasoil cracks are also showing signs of rebounding. Flows via the Kirkuk-Ceyhan pipeline have stopped once again after restarting last week following a month-long shutdown.