|Gas prices were on the rise on Friday, despite weaker demand levels with direction coming from a stronger oil market. Temperatures are expected to rise to above average levels for the rest of the month, while stronger wind output should also reduce the nation's reliance of gas-fired power generation.
|A higher wind generation forecast for the weekend helped to reduce demand for gas-fired generation and pressured down the prompt on Friday. The rest of the curve was dictated by reduced coal output, as well as stronger gas and fuel prices with most contracts moving higher despite the weaker demand forecast for this week.
|Milder weather is expected to result in a 68mcm drop in demand today, with levels at their lowest since the 2nd of January. The UK gas system is also well-supplied despite lower storage withdrawals and limited Norwegian imports. This comfortable supply picture has helped to weigh on the prompt and other near-curve contracts but higher fuel prices have resulted in some gains further along the curve.
|The power curve has tracked the movement of gas this morning although the losses are less prominent. Wind generation was also forecast to rise from 4GW to 5.4GW today and the three coal facilities that suffered outages last week are back online, helping to weigh on the prompt.
Brent 1st-nearby prices moved higher on Friday, correcting upwards following significant losses in previous sessions. However, downward movement is expected today as fundamentals remain extremely bearish due to global oversupply.
1-year forward prices
Market close data has revealed that the 1-year forward price for both commercial gas & commercial electricity increased - closing at 30.70ppt and £34.43/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