Business Energy Market Brief - Jun18
Market Leading Business
Energy Consultants
Your Trusted Commercial Energy Partners
Energy Market ReportsBusiness Energy Market Brief - Jun18

Business Energy Market Brief - Jun18

Chris Hurcombe

by Chris Hurcombe 05 June 2018

Report Summary:

Oil market fuels sharp gains in gas and power prices

key-market-indicatorsEnergy Market Brief - Jun18

On average seasonal power contracts from winter 18 to winter 20 grew 10.6% across May, with contracts for winter 18 and summer 19 up 10.2% and 11.0% to average £59.8/MWh and £48.9/MWh respectively. Contracts were driven upwards by an increase in seasonal gas prices, but also by higher EU ETS carbon and coal prices.

In the nearer term, day-ahead power rose 6.6% to average £54.1/MWh. Rising day-ahead prices approaching summer months is an unusual trend considering seasonally warmer weather and lower demand levels. This was caused by a rise in gas and commodity prices, but also by periods of lower renewables generation in the month.

All seasonal gas contracts saw strong growth in May, rising 11.5% on average. The announcement of the reintroduction of US sanctions against Iran lifted oil prices during the month, permeating bullish sentiment into European gas markets supporting GB prices.

Day-ahead gas prices climbed 9.4% to average 55.9p/th. Day-ahead gas prices dropped at the start of May with warmer temperatures, but later recovered as North Sea gas supplies tightened due to a combination of planned, unplanned and extended outages.