Market Updates


Energy Market Report – 25th April 2018


UK Electricity prices witnessed limited activity this morning. A healthy balance between electricity demand and available capacity should taper rising prices on the day ahead market. As a matter of fact, the day ahead electricity price is down today by 3.3%. Today is the third day when National Grid decided to completely switch off coal-fired power stations. The majority of power generation mix comes from gas (36%), nuclear (20%) and wind (16%) today.

Conversely to the prompt, forward curve seasonal contracts are trading marginally higher this morning, on the back of rising gas prices as well as carbon prices. The bullish sentiment is also supported by falling prices of British currency.


The UK Nat Gas curve edged up this morning with day ahead and month ahead trading up 0.5% and 0.1% respectively. Once again, an expectation of cooler weather and rising domestic demand contributed to the rising prompt market. As a result, the UK gas system is currently under supplied by 7.3 million cubic meters. Three LNG cargo deliveries are expected to arrive this week to the UK, providing over 460,000 cubic meters of liquefied gas.  With such a boost of gas supply, the prices for a near delivery should ease off.

Further out of the curve, we have been observing limited activity this morning. The front curve, Winter-18 is still trading in the narrow range of 56.50-57.00 p/th, amid worries about tightening OPEC oil production policy.

Despite the fact, the US Oil export hit the record high this month, the recent agreement between Russia and the Organization of the Petroleum Exporting Countries (OPEC) pushed the oil price up this month.

Russia and OPEC are major producers and exporters of oil to global markets. They agreed to cut the oil production throughout 2018, as a result prices of Brent Crude Oil reached the record high this year and are currently trading above $75/bbl.


The Office of National Statistics (ONS) announced that UK Borrowing fell to the lowest level in 11 years. Borrowing fell by £3.5bn to £42.6bn in the 2017-18 financial year. Borrowing narrowed to 2.1% of gross domestic product (GDP) last year, down from 10% in 2010. However, total public debt as a percentage of GDP edged up to 86.3%, up from 85.3% the year before. In cash terms it stands at £1.798 trillion.