26th August 2016 | Posted by: Daniel Birkett | Market Analysis

Gas Power
Market Close Market Close
Gas contracts initially opened higher yesterday due to a comfortable gas system and a weaker demand forecast for the Bank Holiday weekend. However, prices gradually rose throughout the session due to an increase in Brent, a weakening Pound and a drop in Norwegian flows. Power contracts strengthened on Thursday as fundamentals turned bullish, with support coming from a rebound in gas and oil. Temperatures were expected to increase today and over the weekend which will result in higher consumption, although the prompt recorded a significant loss due to the usual drop in industrial demand over the Bank Holiday weekends.
Market Open Market Open
Yesterday's outages at the Nyhamna and Heimdal gas facilities in Norway have reduced imports to the continent this morning and offered support to prompt gas prices. Weaker demand has limited the gains somewhat, while a rebound in oil has helped contracts further along the curve move higher. Gains can be seen across the power curve this morning with contracts tracking the movement of their stronger gas counterparts, while a rise in oil and coal has offered support further out. Meanwhile, temperatures are forecast to be 2C ° above the seasonal norm until the 8th of September which will raise cooling demand.

Brent Summary

Brent 1st-nearby prices recorded a small gain yesterday and trade above $49.5/b this morning; comments by the Saudi energy minister in regards to supporting the oil market is behind this bullish sentiment.

1-year forward prices

Market close data has revealed that the 1-year forward price for both commercial gas & commercial electricity increased - closing at 38.81ppt and £42.77/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

energy price graph - 26-08-2016

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