27th January 2016 | Posted by: Daniel Birkett | Market Analysis

Gas Power
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Gas prices displayed mixed movement yesterday and were dictated by a strengthening oil market in the afternoon, despite a healthy supply/ demand picture. Upward movement on the near-curve was limited slightly as the Pound strengthened against the Euro, while the milder weather forecast also offered support to the bears. Demand levels were slightly higher than Monday which tightened the gas system somewhat but overall fundamentals remain healthy. Rising oil prices continue to push gas contracts higher this morning although this afternoon's EIA report could result in downward movement. The supply/ demand outlook is generally unchanged although a slight drop in temperatures is expected tomorrow; resulting in an increase on the prompt.
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Power prices moved higher yesterday and followed the rising gas and oil markets, erasing Monday's losses. Temperatures are expected to remain mild going into February which will reduce consumption but this did little to restrict the gains on the near-curve. However, wind generation was forecast to remain strong today which weighed on the prompt. Power contracts continue to move higher this morning as oil prices continue to increase, which in turn has led to upward movement on the gas curve. Demand levels remain low due to milder weather, while wind generation is also healthy but this failed to have much influence on prices.

Brent Summary

Brent 1st-nearby prices displayed a rebound yesterday afternoon and have climbed back above $31/b. Bullish pressure came from an announcement by the Iraqi oil minister who claims Saudi Arabia could be more 'flexible' in terms of reaching a deal to limit oil output in the country.

1-year forward prices

Market close data has revealed that the 1-year forward price for both commercial gas & commercial electricity increased - closing at 31.25ppt and £34.57/MWh, respectively.

Today's prices can also be found in an easy to read table on our 'current UK energy price'  page.