Energy Market Report - Jul18
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Energy Market ReportsEnergy Market Report - Jul18

Energy Market Report - Jul18

Ian Mckenna

by Ian Mckenna 04 July 2018

Report Summary:

Power and gas prices flatten after prolonged growth

key-market-indicatorsEnergy Market Brief - Jul18

Bearish oil markets, warmer weather and an oversupplied gas system brought a prolonged period of price growth to an end in June, with some power and gas contracts showing falls.

In the nearer term, day-ahead power slipped just 0.2% to average £54.2/MWh. Prices were relatively stable throughout June despite large fluctuations in renewables output. Day-ahead power prices have remained higher than their levels at the start of 2018, an unusual trend considering a move into summer months.

After a prolonged period of growth, seasonal power prices stabilised in June with contracts from winter 18 to winter 20 declining just 0.4% on average across the month. The only contract to rise was winter 18 power, which gained 0.5% to £60.2/MWh. Growth in prices stagnated as gas and oil prices also brought their upwards trends to an end.

Day-ahead gas fell 1.2% to average 55.5p/th. Prices dropped from 58.9p/th at the start of June to lows of 52.3p/th, as an interconnector outage from 13 to 28 June reduced GB’s ability to export gas and left the system oversupplied.

Seasonal gas contracts experienced mixed movements in June, rising 0.1% on average. Winter 18 gas prices rose 0.5% to average 62.7p/th. Gains in winter prices were limited as the interconnector outage allowed for increased gas storage injection for UK facilities, refilling storage levels to 40% of total capacity by 25 June.