Both the gas and power systems in the UK are “comfortable” today, according to the daily market report from npower.
Gas in the system is expected to increase around 6% during the day, which has been driven by “robust LNG”, Client Portfolio Manager Tom Matthews (pictured) said.
He added there are four tankers on the horizon “so terminal operators are desperately releasing the gas from storage so they can make some room for the new LNG expected”.
Demand for gas is 10% below where it is expected at this time of the year despite “robust demand” from Combined Cycle Gas Turbine (CCGT).
CCGT generation is a “touch higher” which is offsetting moderate wind output – currently at around 4% of UK’s supply, according to Mr Matthews.
However, margins are still comfortable and they are not expected to fall below 12GW across the day, he added.
Mr Matthews went on: “We’ve seen markets open a touch lower again today with the front-month now significantly below £39/MWh. Pressure at the moment is coming from comfortable fundamentals, a weak Euro and easing carbon.”
Looking forward he added: “The key data out around the UK will give further direction to the Euro and the curve so keep an eye out on that. Also we expect buying interest to increase across the week as we approach the June default so we may well see a touch of support later on in the week from that.”