The UK power system was well supplied but there were concerns over gas storage levels last week.

That’s according to our weekly market report from npower, which suggests UK gas storage was only 36% full compared to 46% the same time last year.

The tight gas supply also meant near term contracts for both power and gas increased, according to Client Portfolio Manager Sammy Blay. On longer dated contracts, however, there was a clear split between power and gas seasonal contracts last week.

There was strong support for power contracts from rising carbon prices ahead of the key EU environmental Commission’s vote this week on backloading carbon permits. Seasonal gas contracts, however, was under pressure from the reduction in the oil market.

Sammy Blay, Client Portfolio Manager at npower’s Optimisation Desk said: “On the gas contract, pullback in oil meant there was some pressure. However, the prospect that this summer’s injection schedule for UK gas will be much stronger than what had previously been anticipated. And also, a significant fall in the British pound meant that the losses on the gas season were much less than it could have been.”

The report also suggests last week proved to be a good week for UK power generators as there was an increase in both coal and gas power generations. Looking ahead, Sammy suggests carbon will continue to offer direction following the EU’s support for backloading permits.

For a full picture watch the Market Report video each week on ELN.