Prompt and near term gas and power contracts were “under pressure” for most part of last week due to the change in temperature and low demand.
In our weekly market report, Sammy Blay, Client Portfolio Manager at npower’s Optimisation Desk said there was a drop in demand for power and gas as temperatures rose higher compared to the previous weeks’ cold spells.
Sammy said: “Friday, however, saw forecasts that temperatures in February may get cooler in the early part of February, adding to the fact we were a bit concerned about LNG delivery into the UK meant prices eventually found some support.
“However, the losses on the prompt contracts were so much that they couldn’t recover to move back into gains, with day ahead power ending the week 1% down and 2% down for the equivalent day ahead contract.”
Direction for power and gas contracts came from carbon and coal prices although the carbon markets continue to come under pressure due to the lack of confidence on EU plans on backloading permits. However, news about Germany’s renewables subsidies at the end of last week helped the carbon market recover above €4/tCO2e.
Gas storage is currently 54% full compared to 65% at the same point last year.
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