Forecasts of a colder end to the month are boosting UK power and gas prices today, according to the daily market report.
Ben Spry, Optimisation Desk Manager at npower said: “We’ve had revised temperature forecasts showing it’s going to be a little bit cooler for the rest of January, going into February. Quite understandably that’s lifted short-term gas and power prices.”
This trend is also feeding into the front-month prices – i.e. for next month – again both for gas and power.
The morning’s upward price move was however “capped” by a long gas system – that is, the UK’s gas network has more than is being used.
The analyst pointed to the recent trend of price gains in the morning struggling to stick and suggested this could be the case today.
Alongside the weather, other key factors affecting prices are the end of yesterday’s outages at Norwegian gas rigs, as well as oil prices being “pressured down” towards $45 a barrel, said Mr Spry.
In terms of power production, the UK’s power system is “relatively comfortable” as a result of fairly high wind generation peaking at 6 gigawatts (GW). That extra wind power is set to lessen throughout the week, he added.