Small Business Energy Market Update Tuesday 12 Feb 19
What has happened to Gas prices this week?
UK Gas prices continue to fall with prices pressured by warmer weather forecasts and healthy supply of LNG.
The UK weather turned down last week with temperatures falling below seasonal norm with weather models predicting a below seasonal average end to February. From midweek this changed, with the view held that temperatures will now be 3-4°C above average helping to reduce demand.
Late in the week, with the help of Storm Erik, the UK’s gas demand for power was significantly reduced as wind generation lifted considerably. This continued into the weekend with prices pressured at the prompt.
The supply outlook into the UK market remains strong with five LNG cargoes set to arrive in the UK before the end of this week, helping to keep the system comfortable despite rising demand. The mild temperatures and supply outlook are helping to keep gas prices cheap across the near curve.
EUA prices climbed just under €2 through last week as a number of auctions were cancelled, taking supply out of the market. On Thursday / Friday, the prices fell helping to make Coal fired plants more profitable taking gas demand out of the equation.
One bullish factor to take into account was the poor performance of GBP. Poor economic data on Monday proved that the UK economy had failed to grow as forecast failing to live up to expectations with the GBP shedding value against major currencies.
Small Business Energy Market Update Tuesday 12 Feb 19 – Outlook
What specifically affected prices in the past week?
Bullish factors (upward pressure)
- Coal Prices strengthen
- Carbon Emissions Climb
- GBP Weakness
Bearish factors (downward pressure)
- Warmer Weather Forecasts
- Lower Gas Demand
- Higher Renewable Generation & Storm Erik
- LNG Cargoes
Small Business Energy Market Update Tuesday 12 Feb 19 brought to you by British Utilities