Gas and power prices were volatile once again this morning, according to the daily market report from npower.
The price of gas for delivery in February had “swings of nearly a penny” while the equivalent price for power jumped around 30 pence.
Tim Carter, Client Portfolio Manager at npower’s Optimisation Desk said: “Front month gas contract is now trading at 46.6 pence per therm but has been pretty volatile already with swings of nearly a penny.”
Similar swings for prices a little further into the future – with the front season up 0.35p per therm at 43.75p – are “demonstrating the market sensitivity at the moment”.
It was the same story for electricity, said Carter: “Power prices like gas are being volatile this morning with February  opening 30p per megawatt hour (/MWh) up on the close but this has already been given back and it last traded at £40.35/MWh.”
Brent oil “recovered” yesterday, now trading at $51 per barrel but analysts are “really struggling” to understand what is bolstering the price without the Saudis capping oil production.
Carter said: “Yesterday’s support appeared to come mainly from speculative buying… but the US crude inventories did turn lower to give some fundamental support as well. Coal is following oil’s lead, settling around $62 per tonne mark.”
The gas system is just 5 million cubic meters short today while there is a “comfortable” power system.
CCGT gas plants picked up a touch, which he said “could be seen as early signs of fuel switching as the gas price becomes a bit more attractive”.