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Weekly UK Insight

The UK’s Day-Ahead gas rose 7.4% to 32.00p/therm as temperatures dropped across the UK returning to seasonal norms and increasing gas demand.

Day-Ahead power fell 9.4% to £34.39/MWh as the UK experienced high wind levels throughout the week boosting renewable generation.

Winter 2020/21 gas rose marginally by 0.6% this week, rising to 38.60p/therm, reflecting lower temperature forecasts. Despite an oversupplied system gas prices gained slightly on expectations of lower supply due to ongoing maintenance and rising demand as we head into October and temperatures are expected to fall.

Winter 2020/21 power prices fell by 0.8% to £50.65/MWh in slight contrast to gas prices. A fall in carbon prices provided bearish pressure for both power and gas contracts however this was offset by maintenance impacting supply for gas.

The UK gas system was much tighter this week, with an increase in LDZ consumption of around 23mcm/d as temperatures fell. Bullish gas sentiment this week was also due to the scheduled maintenance at Karsto, a Norwegian field planned until 2nd October. Total Norwegian exports also continue to be lower due to maintenances at Gullfaks and Asgard that are expected to continue until the end of October.

With less than a week remaining before the start of Winter 20/21 contracts. Our recommendation for clients with open Winter volume remains to lock this in as soon as possible.

Weekly UK Insight 28 September 2020