Day ahead gas and power prices higher – Y report

Day-ahead gas and power prices continue their uptrend as we enter into the winter. The gas system is oversupplied and LDZ (Local Distribution Zone) demand is relatively neutral while exports […]

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By Jacqueline Echevarria

Day-ahead gas and power prices continue their uptrend as we enter into the winter.

The gas system is oversupplied and LDZ (Local Distribution Zone) demand is relatively neutral while exports to Belgium have been strong, according to Inenco’s Y report.

On the power system, strong wind generation is expected at the beginning of the week but is forecast to be lower towards the end.

Dorian Lucas, Energy Trader said: “That means start of the week we are expecting quite wide supply margins and that’s expected to narrow towards the end of the week.”

 

There is only one nuclear generator offline in the country, however in France there are 12 nuclear sites under safety review, eight of those currently offline.

As a result that has seen really strong demand in France for power supply from the UK via the French interconnector.

Mr Lucas added: “Customers looking to place fixed price contracts for the front 12 months should look to do so as quickly as possible. We are expecting potential further price increases as we move into winter as we see prices become more volatile linked to a kind of shift in supply demand fundamentals.”

He expects customers who are looking to place flexible contracts “are already carrying quite heavy hedges moving into the winter season and for summer 17”.

He added: “However beyond that, it’s down to attitude to risk.”

Market trends and the effects of Brexit will form part of the discussions at the Energy Live 2016 conference on November 3rd in London. Limited free tickets available for energy end users and university students.