Day-ahead gas reaches lowest price in over six years
Business Energy Market Brief - Sep16
Losses in commodity markets created a bearish trend in the GB energy market in August, with nearly all gas and power contracts seeing falls. Seasonal gas prices decreased 5.3% on average, following a slip in oil prices. Winter 16 gas experienced the largest drop, at 6.1%, to average 42.0p/th. Summer 17 gas decreased 5.8% to 38.0p/th.
Seasonal gas prices remained below their levels last year; and the first shale gas shipment is reportedly set to arrive in the UK from the US in September, which could reduce prices further. Centrica announced that it will make 20 wells available at Rough gas storage facility from 1 November 2016. This has improved the supply outlook for the coming winter and pulled the winter 16 price down to a two-and-a-half month low of 39.8p/th on 31 August.
Day-ahead gas moved 10.2% lower to average 31.1p/th. Prices were pushed down by supply generally outweighing demand and flows mostly above the seasonal norm. On 31 August the contract reached its lowest price in over six years, at 26.0p/th..