23rd December 2020 | Posted by: Daniel Birkett | Market Analysis

Gas Power
Market Close Market Close
A lack of progress in regard to the UK’s exit from the EU and subsequent trade deals continued to support prices yesterday, combined with a tighter supply/ demand outlook for Q1-2021. Power continued to follow gas and strengthened on the back of a colder weather outlook and a lack of progress between the UK and the EU in finalising trade agreements. The prompt managed to ease down as wind levels and temperatures across the UK were forecast to improve today.
Market Open Market Open
Gas prices continue to strengthen this morning, with expectations of a cold start to 2021 and reduced LNG supply offering support to the near curve. However, the system remains 35mcm long, with demand sitting 40mcm below the seasonal norm, helped by improved wind power – this has helped to limit gains. Temperatures are forecast to dip 2/3°C below the seasonal average from the 27th December onwards, lifting prices on the spot, with a tighter gas supply outlook also a factor. The prompt is one of the few contracts to move down as wind generation is set to improve again tomorrow.

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

Brent Summary

Brent Crude has dropped closer to $50/b as the situation regarding the pandemic is unchanged from previous sessions, with many countries expected to impose strict restrictions in January.

1-year forward prices

Market close data has revealed that the 1-year forward price for commercial gas decreased, while commercial electricity climbed higher, closing at 44.00ppt and £54.40/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 - 23-12-2020

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