25th September 2014 | Posted by: Daniel Birkett | Market Analysis

Spot power prices moved slightly higher yesterday despite improved wind generation and increased nuclear availability resulting in healthy supply. Energy Market Analysis - 25-09-2014Instead prices took direction from the colder weather at present and an expected drop in renewable production. There has been little change to fundamentals this morning and contracts could display some bearish movement as a result. The UK gas system was short for the majority of yesterday's session due to a drop in storage withdrawals and weaker BBL flows; resulting in numerous gains. A further reduction in Norwegian supply could push gas prices higher this afternoon although weaker demand will restrict the gains. 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 prices fluctuated yesterday, posting gains in the morning but falling lower in the afternoon before another rebound before the session's close. Talks regarding the Russian supply situation are on-going but the colder weather resulting in higher consumption was the main factor yesterday. The power curve tracked gas on Wednesday with the majority of contracts ending the session higher. An improved wind generation outlook provided some bearish support on the near-curve and helped to stabilise the prompt contract.

How did the energy markets open?

The majority of gas contracts posted gains this morning with Day-Ahead rising by 1.10ppt and Front-winter climbing 0.90ppt higher. Prices increased by an average of 0.67ppt with traders keeping a close eye on talks regarding the Ukrainian crisis with winter supply a concern. Meanwhile, far-curve prices rose by as much as 0.50ppt on the back of bullish oil. Power prices followed their gas counterparts but the upward movement was less prominent with Front-Month rising by just £0.05/MWh. Q1-15 was the morning's biggest mover and the contract rallied £0.90/MWh higher. Day-Ahead opened at a £0.55/MWh premium as UK wind generation levels are set to improve tomorrow. Further along the curve most contracts were influenced by stronger carbon.

1-year forward prices

Market close data has revealed that the 1-year forward price for both commercial gas & commercial electricity climbed higher - closing at 56.90ppt and £50.10/MWh, respectively. This can be seen in the graph below.

  energy prices

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 Prices

Brent 1st-nearby prices hit a new low yesterday and fell to $95.6/b but rebounded later in the session to trade at around $96.8/b this morning; strong supply remains the main market driver.