26th February 2013 | Posted by: Daniel Birkett | Market Analysis

We saw more upward movement in NBP spot gas and near curve prices yesterday; both still supported heavily by strong demand. However, the use of storage withdrawals dropped thanks to an improvement in pipeline flows. Elsewhere, TTF March 2013 prices fell -0.42% at the close yesterday. In terms of stock levels, gas stock on the continent is higher than in the UK, which suggests that continental gas demand is less sensitive to temperatures. Gas prices should remain relatively unchanged today. Power's spot markets could experience some lower tightness as temperatures are set to rise alongside a decline in consumption. Despite this, spot prices could be supported until the end of the week, as renewable production in Germany has been weak.

How did the energy markets close?

There was a 1-year high for prompt contracts yesterday, with Day-Ahead closing up at 76ppt and Within-Day trading between 75ppt and 82ppt. The GBP weakened against the EUR, which encouraged upward sentiment in the NBP curve. Power's Day-Ahead saw a huge rise of £5/MWh during yesterday's session, closing at its highest price since last February (£58.50/MWh). We could attribute this to lower wind and nuclear availability, with Hunterston B plant offline for planned maintenance.

How did the energy markets open?

This morning's opening saw a fall in gas prices - possibly helped down by Front-Month Brent dropping on the back of the Italian election results. This could hinder overall Eurozone recovery. Power's contracts also fell back this morning after a busy day yesterday. Day-Ahead was dragged £2.35/MWh lower on the back of lower forecasted peak demand for tomorrow.

1-year forward prices

Yesterday saw a rise in both 1-year forward prices for business power and business gas. This has been represented in the graph below.

Latest Brent Crude Oil prices

As we reported yesterday, Brent 1st-nearby's prices hinged on the Italian election results. If they were good, prices would rise... but if they weren't viewed as good, Brent could fall down to $113.30/bbl; which is exactly what happened. During yesterday's session, Brent 1st-nearby hit $115.87/bbl ahead of the elections, but dropped to $113.30/bbl this morning. Since then, there has been a marginal recovery, with levels now at $113.60/bbl. So, the focus will remain on the aftermath of the Italian elections - with Bernanke's speech and US economic data possibly bringing some short-term positivity  this afternoon. Note: Brent Crude prices are taken from opening market data, and do not represent the price as it changes throughout the day.