Power and gas prices open lower – DMR

The UK has seen gas and power prices open lower this morning. They have come under pressure from weaker oil prices combined with “comfortable” gas fundamentals, according to npower’s daily […]

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By Priyanka Shrestha

The UK has seen gas and power prices open lower this morning.

They have come under pressure from weaker oil prices combined with “comfortable” gas fundamentals, according to npower’s daily market report.

The gas system has opened in length with the linepack currently forecast to close 14mcm long.

Gemma Bruce from the Optimisation Desk said: “This is largely helped by an increase in both Norwegian flows and LNG send-out.”

South Hook is flowing at its full capacity of 59mcm due to flow rate tests which have started today. Nominations are however lower at 35mcm “so we are likely to see an adjustment to their flows across the day”.

Exports to the continent remain high at 25mcm.

 

On the power side, peak margins are forecast at just 7.5GW with wind generation falling short and imports through the French interconnector at 1.5GW.

Wind is currently at just above 2GW but is forecast to reach a peak of 5.5GW by this evening “although current output makes this look unlikely”.

Ms Bruce added: “Oil prices have dropped back below $44/Bbl (£30.5/Bbl) this morning as the wildfires in Canada have eased allowing for production that was closed to get back up and running. This combined with Saudi Arabia announcing that they now plan significant growth output in 2016 has prompted the retreat in prices seen this morning. With gas markets taking a lot of their direction from oil markets at the minute, this is the main driver of softer prices this morning.

“The pound has improved against the Euro following some weaker than expected French and German industrial production data, currently worth €1.266.”