On Thursday prices resumed their downward trajectory with significant reductions in Gas, and more modest reductions in the wholesale price of UK Electricity.
At this stage there is no reason to think that situation is going to change and we expect continued downward pressure on both Gas and Electricity prices in the months ahead.
In terms of UK power generation, in the past week renewables were up over 40% again. This has meant that the generated price has reduced and is now back below £60/MWh. We expect continued downward pressure in the generation price as we go in to Summer and solar kicks in, while there is still downward pressure on the price of fossil fuels.
| Gas: Gas prices settled bearish in yesterday’s session. British daily demand was 61MCM below seasonal average. Weighing on the front curve, temperatures are forecast to be 1-3°C warmer in March than the norm. Power: Power prices fell yesterday, continuing to track the wider energy complex, namely Gas and Carbon. Four Nuclear reactors with a capacity of 2.4GWs are currently offline due to unplanned outages. This has contributed to February so far being 1.4GWs below the previous 4 year average output for nuclear generation. Oil: Oil prices rose yesterday following supply concerns from the US and the Middle East. Unplanned outages in the US has caused inventories to be 10% below their 5 year average. Further tanker attacks in the Red Sea continue to apply upwards pressure. Carbon (EU ETS): The ICE Dec-24 contract returned to its decline after some upside, falling to €52.8/t yesterday. The contract is currently trading at €52.17/t. Carbon (UKAs): The ICE Dec-24 closed at £33.87/t yesterday, a slight decline on the previous session. Opening lower this morning at £33.65/t, the contract has found some support and is currently trading at £34.1/t. |
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