Gas

p/therm 24 Jan 20 31 Jan 20 Change
Day-Ahead (DA) 27.60 25.10 -9.1%
Mar 2020 25.93 24.18 -6.7%
Summer 2020 25.58 24.58 -3.9%
Winter 2020/21 37.32 35.25 -5.5%

The UK’s Day-Ahead gas price fell 9.1% to 25.10 p/therm, as higher LNG imports and plentiful gas supply in Northwest Europe complimented Britain’s above seasonal normal temperatures last week.

Total LNG send-out rose to 71 mcm/d with nine cargoes confirmed for delivery over the next month.

March 2020 gas prices also fell 6.7% reflecting Europe’s well stocked gas storage, above seasonal normal temperature forecasts for the majority of February and seasonally weak power demand.

Growing LNG supplies from the USA has supported Britain’s gas system, slowing the rate at which gas storage facilities in the UK and Continental Europe are being emptied. Despite entering February, historically one of the coldest months of the year, EU gas storage is still at a whopping 71%, far higher than the 51% recorded at the same time last year.

The Summer 2020 gas price declined 3.9% week-on-week to 24.58 p/therm. The UK and Europe’s high levels for gas storage, combined with record deliveries of LNG and unseasonably strong power production in Europe’s Nordic and Central European regions, mean the outlook for next summer’s supply and demand balance continues to look comfortable.

Prices continue to slide, although the uncertain nature of energy markets means we recommend going to market and getting contracts locked in before the end of June.

Power

£/MWh 24 Jan 20 31 Jan 20 Change
Day-Ahead (DA) 36.05 24.87 -31.0%
Mar 2020 35.95 34.24 -4.8%
Summer 2020 35.84 34.67 -3.3%
Winter 2020/21 44.21 42.60 -3.6%

Day-Ahead power prices crashed 31.0% to £24.87/MWh, reflecting stronger wind generation, cheaper gas prices and a stronger Pound.

Summer 2020 power prices dropped 3.3% to £34.67/MWh in response to losses in the equivalent gas, coal and carbon markets and the stronger Pound. The lower cost of gas and coal means power production is expected to be less expensive over the next year.

However, carbon prices are expected to rise gradually towards €40/tCO2 over the next 5 years, according to CRU (formerly Commodities Research Unit), boosting the cost of power production in the UK and Continental Europe.

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