|Gas prices moved higher on Wednesday afternoon due to a mixture of outages in Norway, reduced production in the Netherlands and upward movement on the oil market. LNG supply was weak due to a lack of scheduled deliveries, while flows via the St Fergus terminal were also lower, resulting in a tight system.
|Day-Ahead power shed from its price yesterday due to an expected rise in renewables which would lead to a drop in gas-fired power generation. A cooler weather outlook and weak gas supply helped to lift contracts on the rest of the near-curve, while the effects of weakening coal prices were offset by rising oil.
|The UK gas system has opened 17mcm long this morning as overall flows have increased and CCGT demand is lower due to healthy wind levels. Despite this, the near-curve has climbed higher with planned maintenance scheduled at a number of facilities during May, with uncertainty surrounding their return dates. Meanwhile, any upward movement at the back of the curve has been capped by a drop in Brent and coal.
|As expected solar and wind generation exceeds gas-fired power this morning, however, this has failed to restrict bullish movement on the near-curve. Wind levels are expected to drop tomorrow and planned outages at gas sites in Norway and the UKCS have provided support. Further out, the overall sentiment is also bullish but weaker oil has limited the gains.
For a breakdown of the current generation mix visit our Power Generation Insights page.
Brent 1st-nearby prices have decreased by over $1/b and trade at $74.3/b this morning following the release of a bearish EIA report, however, the overall outlook remains supportive and an upward correction is likely.
1-year forward prices
Market close data has revealed that the 1-year forward price for both commercial gas & commercial electricity increased – closing at 50.59ppt and £50.46/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
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