Market Updates


Energy Market Report – 25th May 2018

Key Points:

  • UK gas and electricity prices slipped amid the bearish oil and coal prices.
  • the Bank of England warns against a period of higher inflation, if “Brexit” talks are disruptive to the transition process.

UK Electricity Prices:

UK electricity prices slipped throughout the curve this morning. Day ahead is trading around £56.75/MWh, while month ahead is at £54.90/MWh. The electricity demand system is currently supplied by gas and nuclear for about 80%. Wind generation dropped to 6.4%.

Further out the curve prices continue falling, Win-18 is currently trading at £61.15/MWh and Sum-19 is at £49.60/MWh.  European coal prices for delivery in Dec-18 dropped to $86.50/tone, despite the fact that Columbian production dropped year on year.

UK Natural Gas Prices:

UK Natural gas prices are also trading lower this morning. Day ahead and month ahead are at 57.00p/th and £56.45p/th respectively. Despite the system being undersupplied, prices slipped on the back the bearish momentum from oil markets.

Oil prices eased off on Friday morning amid speculations that Russia and OPEC are going to relax the production curb and increase oil output. The decision has been driven by recent developments in Venezuela and Iran. Win-18 is at 64.10p/th, about 3% below the highest prices reached so far. The   Sum-19 contract is currently trading at 49.60p/th, 5.6% below the highest price achieved so far.


Mark Carney, the governor of Bank of England, warned that the “Brexit” talks are entering their most critical phase. Any disruptions in a transition process to a post-Brexit era may have an impact on interest rates.  It may happen that the country will have to “tolerate a period of higher inflation or put the brakes on economic activity.”