|Gas prices moved higher yesterday as renewable power was expected to decrease even further today, leading to a rise in CCGT demand. Warm weather kept residential demand below the seasonal norm and Norwegian outages were resolved, capping the gains somewhat. Further out, any upward movement was restricted by a bearish oil market.
|Renewable generation was expected to decrease today, limiting any downward movement on the prompt. Following a bearish opening, prices on the near-curve recovered as the session progressed on the back of the expected rise in gas-fired power generation. Meanwhile, prices at the back of the curve moved down with direction provided by weaker oil markets.
|The UK gas system has opened short this morning despite an increase in flows from Norway, as weak wind and solar has led to an increase in CCGT demand, while LDZ demand is also slightly higher. This has helped towards gains at the front of the curve, although falling Brent, coal and carbon has provided resistance further out.
|Weak renewables continue to provide upward pressure at the front of the curve as gas is required to make up the shortfall. Warm weather continues to increase cooling demand, further contributing to the gains, while falling oil and coal markets have helped towards some losses at the back of the curve.
For a breakdown of the current generation mix visit our Power Generation Insights page.
Brent 1st-nearby prices display another loss this morning, falling by $1/b to trade around $74.5/b. Bearish sentiment has been provided by an expected rise in output next month and major hedge funds stepping away from the crude market.
1-year forward prices
Market close data has revealed that the 1-year forward price for both commercial gas & commercial electricity increased – closing at 56.90ppt and £56.06/MWh, respectively.
Today’s prices can also be found in an easy to read table on our ‘current UK energy price' page.
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