The UK’s Day-Ahead gas price increased by 5.8% to 13.75p/therm at the end of last week as many UK businesses, including non-essential retail shops, are due to reopen this week boosting the demand for gas for power generation.
Day-Ahead power saw a surge of 89.4% to £28.99/MWh as the easing of lockdown in the UK continues ahead of the reopening of UK businesses on Monday expected to increase power demand significantly.
Winter 2020/21 gas decreased by 3.9% to 30.86 p/therm following drops in both oil and equities, with concerns over a potential second wave of the Coronavirus in the US and China weighing on markets. Covid-19 cases jumped in both Beijing and the US last week to fuel fears of further lockdowns and demand slumps later this year.
Planned maintenance at the Barrow North and Britannia gas pipelines this week will lower supply while day ahead gas for power demand is expected to increase next week on the continent as French Nuclear outages are scheduled, meaning Britain could end up increasing power exports to Europe.
The UK passed a landmark at midnight on Wednesday as the country went two full months without burning coal to generate power. The current coal-free period smashed the previous record of 18 days, 6 hours and 10 minutes which was set in June last year.
Our recommendation remains to lock in contracts as soon as possible as prices begin to rise following the easing of lockdown restrictions. This is compounded by economic uncertainty around a potential second wave of Covid-19.