Temperature forecasts are continuing to dominate gas and power market prices, according to npower’s daily market report.
“The colder weather at present continues to support prompt prices with the day-ahead power contract trading at £47.70/MWh while the near curve continues to come under pressure and has opened flat to a touch lower than the close albeit activity on the power market has been slow to get going this morning,” said Client Portfolio Manager Gemma Bruce.
Temperatures are expected to be back above seasonal normal levels at the end of the month.
Brent oil has rebounded slightly from the lowest close in 12 years “as commodity prices shrug off weaker than expected Chinese economic data although the front month is still trading below $30/bbl (£21/bbl)”.
“This obviously continues to weigh on gas prices as some of the historic European gas contracts continue to be indexed to the price of oil,” Ms Bruce added.
The gas system has opened “in length” despite demand significantly above seasonal normal levels, with the linepack forecast to close 20mcm long.
Demand has picked up to 353mcm, supported by high levels of gas-fired generation online.
Both Dutch and Norwegian flows are “healthy” this morning with Langeled and BBL importing 69mcm and 34mcm respectively.
“There is also reasonable storage withdrawals this morning with Rough currently exporting 41mcm and Aldbrough also flowing over 19mcm, adding to the system comfort,” Ms Bruce said.
The power system margins are however tight this morning at 8GW “as wind generation is lack lustre and is not expected to contribute much to the stack over the next couple of days”.