Energy Market Update – 01 June 2015

1 June 2015

Gas

Prompt contracts have softened this morning on the back of increases to forecasted temperatures later this week. These losses are being restricted by a reduction in LNG withdrawals. Along the near curve contracts have found bearish support following news of a further tanker scheduled to arrive at the South Hook terminal on the 6th June. On the far curve contracts have been undermined by a weak Brent Crude market.

Day Ahead is currently offered at 43.60p / therm, a loss of 0.25p / therm from its previous settlement, with Winter ’15 offered at 48.00p / therm (0.14p / therm below previous settlement), and Summer ’16 is offered at 43.70p / therm (0.01p / therm below previous settlement).

Power

Day Ahead contracts have fallen this morning due to a significant rise in wind generation expected tomorrow. This is despite the shortfall in the gas system caused by the Hartlepool-1 nuclear reactor going offline. The near curve has eased slightly due to bearish pressure from the prompt and equivalent gas products. Prices on the far curve have also softened taking weight from prompt and near curve contracts.

Day Ahead is currently offered at £38.70 / MWh, a loss of £2.10 / MWh from its previous settlement, with Winter ’15 offered at £45.55 / MWh (a fall of £0.18 / MWh), and Summer ’16 offered at £42.25 / MWh (a loss of £0.20 / MWh from previous settlement).

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