Catalyst Business Energy Market Brief July 2015
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Energy Market ReportsCatalyst Business Energy Market Brief July 2015

Catalyst Business Energy Market Brief July 2015

Jamie Flanagan

by Jamie Flanagan 01 July 2015

Report Summary:

Gas and power contracts reach new lows

Gas and power contracts reach new lows

key-market-indicatorsAnnual power and gas contracts were down in June. The annual October 15 gas contract rose early in the month, reaching a high of 47.0p/th, before falling to an average of 46.0p/th. This was 1.5% lower than in May. The initial increase was due to worries over the imposed Groningen production cap, limiting the supply outlook; however, higher LNG and Russian supplies compensated for the losses. The winter 15 power contract followed lower, dropping 0.6% to average £45.9/MWh, the lowest level since the contract opened.

Spot power and gas contracts also increased initially, as gas generators were running at their highest level in many months. There was a marked decrease in both wind and coal powered generation.

The Greek debt crisis caused a weakening of the euro versus the pound, making both gas and power imports much cheaper. This led to a decline in contracts. Day-ahead gas averaged 43.5p/th, the lowest since August 2014. The day-ahead power contract averaged £41.6/MWh, a 1.2% rise from May.