Energy Market Update – 14 May 2015

14 May 2015

Gas

Prompt contracts fell this morning due to an increase to LNG supply in the system. This has outweighed the bullish pressure caused by the forecasted lower temperatures for the remainder of the week. Similar movement can be seen on the near curve, with all markets opening below previous closing points. The LNG tanker Mesaimeer is scheduled to arrive at South Hook on the 21st May. This is in addition to the three that are already destined for British Ports and has boosted the supply outlook for the near-term. Further out on the curve prices have echoed the movements on the near curve, however the current strength of the Brent crude oil market has mitigated further losses.

Day Ahead is currently offered at 44.45p / therm, a loss of 0.80p / therm from its previous settlement, with Winter ’15 offered at 49.28p / therm (0.37p / therm below previous settlement), and Summer ’16 is offered at 44.75p / therm (0.24p / therm below previous settlement).

Power

Day Ahead has softened as bullish pressure from colder temperatures has been offset by expected increases to wind generation for Friday. Demand is also set to rise tomorrow as a result of below seasonal norm temperatures. Prompt power prices have also been weakened by a softer gas prompt. Bearish influence from the impending LNG tankers has softened prices on the near curve. The far curve has been mixed due to due to bullish influence from the wider fuels market.

Day Ahead is currently offered at £43.50 / MWh, a gain of £0.15 / MWh from its previous settlement, with Q3 2015 offered at £41.42 / MWh (a fall of £0.18 / MWh), Winter ’15 offered at £46.45 / MWh (a fall of £0.10 / MWh), and Summer ’16 offered at £43.05 / MWh (a loss of £0.15 / MWh from previous settlement).

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