Energy prices soften further
NBP Natural Gas & GB Power Market Movement
UK energy prices fell across the board on Monday with supply outstripping demand and on expected improved wind and solar power for the next working day (on Tuesday). With at least two LNG tankers en route to dock in the UK and weakness in the oil market, prices falls continued into Tuesday and this was despite an announcement from Centrica that Rough may be suspended for a whole year from April 2017.
Mid-week, however, prices did regain with UK energy markets heavily correlated to bullish oil and currency markets that day. Data confirmed less favourable economic conditions for the UK, igniting speculation around the future of the UK economy since the Brexit vote and in a post-Brexit era. Continued expectations of a reduction in national demand translated into price falls on Thursday. The gas system was once again oversupplied thanks to higher UK gas production. Demand for gas from the power sector fell on higher low-cost wind power. Oil closed the week stable despite the OPEC-led productions cuts. Coal ended the week more than 2.5% down. The biggest mover however was LNG sendout, which rose 225% week-on week on Friday.
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