UK gas prices have opened “roughly” flat, according to npower’s daily market report.
Gemma Bruce from the Optimisation Desk said: “The seasonal gas contracts are trading lower than the close taking their lead from the oil and currency markets. As normal for a Friday, power markets are slow to get going but are likely to mirror the movements of the gas market.”
The gas system is short with the linepack forecast to close at 9mcm as demand is above seasonal normal levels.
Flows from Norway through the Langeled pipeline are at 30mcm and LNG send-out from South Hook and Dragon terminals stand at 38mcm. A tanker is expected to arrive next week.
On the power system, the peak margin is forecast at 13.6GW despite low wind generation which is under 1GW.
CCGT generation is providing 54% of the energy mix and nuclear is producing 7.5GW.
The French and Dutch interconnectors are importing at full capacity.
Brent oil is trading at $49.1/bbl (£33.3/bbl).
Ms Bruce added: “Oil prices have steadied below $50/Bbl this morning after surging yesterday on the back of a larger than expected draw in US stockpiles. The slight easing of prices is being attributed to the restart of production in Canada following the wildfires which saw production reduced by around one million barrels per day.
“Upside risk certainly remains in the oil market however with a number of production niggles still underway and with the global supply glut being slowly eradicated, it certainly seems that the Saudi’s strategy is finally paying off having squeezed out rival producers which could suggest they would be more willing to co-operate in a production freeze which is to be discussed at the next OPEC meeting.”
The pound this morning is worth $1.46.