28th February 2013 | Posted by: Daniel Birkett | Market Analysis

As demand remained more or less unchanged at high levels yesterday, NBP spot and near curve gas prices stayed firm. Today's forecasted higher temperatures should lead to a drop in European gas demand. At the same time, UK NTS demand is also expected to be lower. These drops could, along with an increase in pipeline supply from Norway, help to push April 2013 prices down. With temperatures heading up after the weekend, power consumption should ease - with levels in France perhaps returning to average. Meanwhile, over the next few days, power's spot markets should experience limited tightness.

How did the energy markets close?

The fragile Eurozone political landscape contributed to a bearish start for NBP gas prices yesterday. However, after heavy trading and concerns over storage levels, the bulls soon regained control - with Day-Ahead and Front-Month adding around 0.8ppt to their opening values; closing at 70.7ppt and 68ppt respectively. Since Monday's opening price of £58.50/MWh (a one-year high), Day-Ahead power has seen a steady drop; closing trading down at £53.75/MWh. Meanwhile, S-13 and W-13 both grew £0.25/MWh within-day - possibly following their gas counterparts.

How did the energy markets open?

On the back of a decline in demand (because of expected rising temperatures), Day-Ahead gas opened lower this morning. However, this sentiment wasn't seen throughout the curve, with Front-Month opening 0.6ppt higher at 68.6ppt. Power's Day-Ahead shed £1.55/MWh off its closing price to open up at £52.00/MWh. This fall can be put down to a fall in Day-Ahead gas as well as weaker Friday demand. Out on the far curve, S-13 and W-13 both added £0.25/MWh to their prices; opening trading at £50/MWh and £55.6/MWh respectively - despite the continued fall in Brent Crude.

1-year forward prices

The 1-year forward prices for business gas and business electricity both saw a rise yesterday - which can be seen in the graph below.

Latest Brent Crude Oil prices

Brent suffered even more yesterday, falling to $111.7/bbl at one stage. This came despite positivity being back on financial markets as well as the EUR/USD being up. Prices opened up at $112.3/bbl this morning. Following on from yesterday's focus, the EIA report revealed a 5.9 Mb drop in overall stocks. Prices could be pushed up to $113.5/bbl early on today on the back of stronger risk appetite. However, with talks on US spending cuts and further political uncertainty in Italy, we could see a downward correction to $109.9/bbl at some stage. Note: Brent Crude prices are taken from opening market data, and do not represent the price as it changes throughout the day.