On Thursday wholesale gas prices increased in the near term, pushing up electricity prices as well.
April and October start gas contracts strengthened across the curve, while corresponding power contracts softened, indicating gas-led upward pressure alongside compression in power prices.
Generation costs continued to fall to £85.71/MWh from £92.31/MWh last week. Due to a low-wind week, fossil fuels are driving the mix at 40.8%, followed closely by renewables at 38.0%.
| Gas: Gas prices rose yesterday, recovering from heavy losses from earlier in the week. Doubts about refilling European storage over the summer to sufficient levels supported the price gains. The market expects significant regasification maintenance over the summer and has weighed the limitations of LNG supplies. Power: Power prices were mixed yesterday. Prompt gains followed the increases in Gas and European Power markets, despite renewables and temperatures being forecast to return to average after several weeks of below‑average performance. Curve prices fell, tracking the sell off of Carbon contracts across Europe. Oil: Oil prices fell yesterday due to falling demand and a “sizeable surplus” despite supply cuts in January, according to the IEA. The US is continuing talks with Iran, whilst the market anticipates Venezuelan oil to be added to supplies soon. Carbon (EUAs): The ICE Dec-26 fell to €72.54/t yesterday. The contract opened higher this morning at €73.80/t. EUAs have been losing value recently as Germany, Italy and Czech Republic made comments about the EU revising the scheme, with the Czech PM suggesting an initial view of capping the price at €30/t. Carbon (UKAs): The ICE Dec-26 continued to lose value, closing at £46.15/t yesterday. Opening higher this morning at £46.9/t. The recent sell off of UKAs is due to investors losing confidence in the stability of the UK government, a lack of firm policy direction and a failure to align closely with the EU contract. |
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