UK gas and power prices have increased today compared to last night’s close, according to npower’s daily market report.
Sam Hill from the Optimisation Desk said: “This is on the back of oil prices which have pushed up back above $49/bbl (£33.8/bbl).”
On the gas system, the linepack is forecast 1.5mcm short.
Langeled flows from Norway are at more than 30mcm and exports through the UK Interconnector are at 33mcm.
South Hook LNG send-out is at 37mcm.
Mr Hill added: “Temperatures for the UK are forecast to steadily increase above seasonal normal levels as we head into June. As you may know during the winter months last year and into this year we experienced the effects of the global weather phenomenon El Nino, which saw the warmest December on record.
“What often follows this is the La Nina weather pattern. This brings with it cooler temperatures and curtailed wind speeds. The Met Office believe this may be a possibility for this winter. If this is the case electricity prices may rise as demand increases and wind generation reduces tightening margins.”
On the power system, the peak margin is under 11GW due to a fall of imports through the French interconnector which is at half of its capacity.
The Dutch one continues importing at full capacity.
Wind is generating below 2GW and gas-fired power generation is at 18GW providing 52% of the energy mix.
Brent oil is trading at 49.2/bbl (£33.9/bbl).
Mr Hill went on: “This is being driven by expectations that US crude stockpiles will fall when inventory data is announced later today. Any sign of reduced production in a climate with security of supply issues will see prices push up, although the size of the supply glut will have its part in taking prices in the opposite direction.”
The pound is valued at €1.31, its highest level since January.