|Gas demand remained high yesterday as temperatures were below average, however, the gas system was oversupplied due to improved LNG send-outs. LNG flows rose from 41mcm to 57mcm with numerous deliveries expected to dock in the UK over the next week. Norwegian and Dutch imports into the UK were also higher and this healthy supply picture helped to weigh on contracts on the near-curve, with a drop in oil weighing on far-curve prices.
|Below average temperatures lifted demand levels on Wednesday and the wind generation was weak which helped the prompt record a gain of around £4.50/MWh. The rest of the curve posted small losses and followed the movement of weakening gas and oil.
|A rise in Brent has offered support to contracts on the far-curve this morning, correcting some of yesterday's losses. Demand levels have increased further this morning but milder temperatures are expected to return to the UK next week which has resulted in bearish movement on the near-curve.
|Wind generation levels are expected to rise significantly next week, increasing from 0.5GW to 4.5GW which has helped the prompt record a massive loss of over £6/MWh. This loss filtered through to the rest of the near-curve with a milder weather forecast for next week also a factor. Contracts further out were offered support by their stronger gas counterparts which were dictated by a rise in Brent.
Brent 1st-nearby prices have increased this morning as the recent EIA report showed a decline is US output, while further support came from a drop in US shale gas; helping Brent climb towards $34/b.
1-year forward prices
Market close data has revealed that the 1-year forward price for both commercial gas displayed a loss, while commercial electricity increased slightly - closing at 30.48ppt and £34.68/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