Both power and gas prices are trading lower again, according to the daily market report.
That’s despite cooler temperatures “as gas supply easily copes with the increased demand”.
Gemma Bruce from npower’s Optimisation Desk said oil has also come under pressure today following announcements from Iran on its intentions to grow market share.
She added: “Oil has fallen by a couple of dollars overnight with the front month now trading at $32.86/Bbl as Iranian officials dismiss proposals for a cap on production. Iran has been heavily impacted by sanctions for several years and are therefore keen to make up for lost time and increase output, growing their market share.
“With some European gas contracts still linked to the price of oil, this has seen the gas curve open lower this morning despite the colder weather.”
Looking at the gas system, the report said the linepack is forecast to close in length.
Norwegian flows via the Langeled pipeline “continue to be healthy” at close to 69mcm at present with Dutch flows via the BBL at 22mcm.
The power margins remain tighter at 8.7GW with wind generation “virtually non-existent” at just 392MW.
As a result, there has been an increase in thermal generation to cover the shortfall with CCGT and coal generation making up 45% and 23% of the stack respectively.
“Elsewhere the pound has continued to come under pressure against the euro as a reaction to more front bench conservative MPs giving their support to the leave campaign,” Ms Bruce added.