Market Updates


Energy Market Report – 23rd May 2018

Key Points:

  • UK Electricity and Gas prices inched down today amid oversupply in the gas demand system and falling crude oil prices.
  • Annual inflation in April-18 hit the lowest level since March 2017.

UK Electricity Prices:

UK electricity prices edged down this morning, amid falling natural gas prices and European coal contracts. Month ahead contract is trading about 1.63% lower on Friday’s close and is currently consolidating around £57.25/MWh.

Long term seasonal contracts are oscillating around £65.85/MWh and £51.95/MWh for Win-18 and Sum-19 respectively. Forward curve contracts remain in backwardation. This means that the further the curve the cheaper contracts are.  The contract Win-19 is currently trading at £57.52/MWh and Sum-20 at £47.10/MWh.  The bearish momentum has been supported by falling Coal prices.

UK Natural Gas Prices:

Yesterday, unexpected outages at Vesterled limited the gas output to the UK from Norway. Prices for near term delivery rallied yesterday. Conversely, the gas curve is trading lower today. The demand system is oversupplied by more than 21 million cubic meters. The supply forecast for today is about 203 million cubic meters. The actual flow is slightly below the forecast, however there is enough gas coming to the UK.

Day ahead prices are currently trading at 58.65p/th whereas Jun-18 contracts are at 57.40p/th. The UK month ahead contracts are trading about 1p/th cheaper than the equivalent contract at TTF hub. The Dutch gas hub which is currently the most liquid place to trade gas in Europe.

Further out the curve, seasonal contracts also inched down. Win-18 is at 62.15 p/th and Sum-19 is at 51.47 p/th. The bearish sentiment came from oil markets, where Brent crude is trading lower today and it is currently at $78.95/bbl. Yesterday, the European oil benchmark – Brent Crude – hit almost 80.00/bbl amidt rising a threat of additional production cuts from Iran and Venezuela.


Annual inflation in the UK edged down to 2.4 percent in April of 2018 from 2.5 percent in March, below market expectations of 2.5 percent. It is the lowest rate since March of 2017, mainly due to a slowdown in cost of transport, food, clothing and footwear. On a monthly basis, consumer prices rose 0.4 percent, following a 0.1 percent gain in March but below forecasts of 0.5 percent. The largest downward contribution came from air fares, which were influenced by the timing of Easter while rising prices for motor fuels produced the largest, partially offsetting, upward effect. The Inflation Rate in the United Kingdom averaged 2.58 percent from 1989 until 2018, reaching an all-time high of 8.50 percent in April of 1991 and a record low of -0.10 percent in April of 2015.