With temperatures expected to remain above average, we see no serious risks for the UK gas system over the coming days. The forecasts of colder weather from the middle of next week, along with the on-going Norwegian Troll outage, may actually help month-ahead prices stabilise. On the whole, gas curve prices will be linked to oil prices today. As a result of higher temperatures and strong wind generation, downward pressure on spot power prices is continuing. It's important to note that even if we aren't expecting tension in the spot markets over the next few days, Day-Ahead price levels are likely to rise next week.
How did the energy markets close?
Yesterday's long system pushed prompt gas contracts lower, as Within-Day closed at 64.9ppt and Day-Ahead dropped to 65.4ppt. Feb-13 cut 0.5ppt off its price - despite only one scheduled LNG cargo for Milford Haven in the next seven days. Elsewhere on the curve, losses were restricted as Brent secured a three-month high of $115/bbl. Power's Day-Ahead climbed more than £1.50/MWh on the back of cooler weather forecasts, while spark spreads dropped to new lows during the session.
How did the energy markets open?
For the second day in a row, NBP gas curve saw losses - this, again, could be down to a comfortable system. Norwegian flows via St Fergus were higher this morning while some storage units opted for injections. No imports were recorded through the Bacton Interconnector, with the NBP/Zeebrugge spread turning positive. The usual Friday drop in demand didn't faze power's Day-Ahead prices - as the opened £2.35/MWh higher this morning. The rest of the power curve moved in accordance to lower emissions and coal prices.
1-year forward prices
There was an increase in both 1-year forward prices for commercial gas and commercial electricity. This can be seen in the graph below.
Latest Brent Crude Oil prices
Gasoline is still the leader in the oil complex - pushing Brent 1st nearby prices up to $115.24/bbl yesterday. However, mixed economic data from the US slowed gains later in the day. The EIA report showed a 5.9 Mb rise in crude inventories (a new record high for this time of year) as well as a 1 Mb drop in gasoline stocks and a 2.3 Mb fall in distillate stocks. We could see a correction in prices today, particularly if the weekly figures detailing US jobless claims show a rebound. Note: Brent Crude prices are taken from opening market data, and do not represent the price as it changes throughout the day.