|Supply concerns pushed gas contracts higher yesterday afternoon as colder temperatures are forecast for next week, while storage levels remain low. An announcement is also expected from the Dutch government on Thursday in regards to further production cuts at the country’s largest gas facility in Groningen. Meanwhile, coal prices displayed a strong rebound due to a potential miner striker in South Africa, supporting contracts at the back of the curve.
|Power prices followed the gas market with the direction coming from a combination of domestic gas supply concerns and expected production caps at Groningen. Wind levels were also forecast to drop today, offering support to the prompt, while the back of the curve moved higher on the back of strengthening coal and carbon markets.
|Demand levels are 55mcm above the seasonal norm this morning but the system is 4.4mcm long thanks to withdrawals from storage sites. Below average temperatures are expected for the start of April and the likely announcement of a cut to production capacity at Groningen tomorrow has helped gas prices climb higher. Further out, prices have increased despite a drop in Brent as coal and carbon contracts remain bullish.
|Renewable generation is set to remain low tomorrow, helping the prompt add to its price. The rest of the near-curve has moved higher as a result of a colder weather forecast for next week and potential gas supply issues. Meanwhile, rising coal and carbon continue to influence prices at the back of the curve.
For a breakdown of the current generation mix visit our Power Generation Insights page.
Brent has dropped to $69.5/b this morning with bearish sentiment provided by the US stocks forecast, as instead of an expected decrease, crude inventories rose by 5.3 Mb last week.
1-year forward prices
Market close data has revealed that the 1-year forward price for both commercial gas & commercial electricity climbed higher – closing at 49.90ppt 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
If you would like to learn more about how Apollo Energy can help your business find the best deal on its gas and energy contracts then feel free to get in touch by calling us on 01257 239500 or using the form on our contact form.