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Energy Market Report – 2nd May 2018

Key Points :

  • UK Gas and electricity prices edged lower this morning.
  • Markets Await Federal Reserve policy decision today.

UK Electricity Prices:

UK electricity prices, for the next months delivery, are trading lower today, amidst healthy wind generation. Wind generation stands for 21% of the wider generation mix today. Coal fired power stations are supplying around 4%, whilst nuclear stands for about 18%. Electricity Month ahead prices rose over 11% within the last month. Prices were very volatile on the back of rising electricity demand and bullish gas prices.

Further out the curve, seasonal contracts edged down in line with seasonal gas contract counterparts. European coal as well as carbon emission contracts are falling bringing a bearish sentiment to the UK electricity forward curve.

UK Natural Gas Prices:

The front UK natural gas contracts slipped for the second day in a row. Day ahead and Month ahead are trading 0.87% and 0.78% down respectively. Despite the gas demand system being undersupplied, the spot and prompt prices are falling.

Further out the curve, seasonal contracts also edged down this morning. Brent Crude oil prices are currently trading at $72.88/bbl, down 0.31%. The U.S. Energy Information Administration will release its official weekly oil supplies report for the week ended April 27 at 10:30AM ET (1430GMT), amid forecasts for an oil-stock increase of 739,000 barrels. After markets closed Tuesday, the American Petroleum Institute said that U.S. oil inventories rose by 3.4 million barrels last week.

Macroeconomics:

The Federal Reserve is set to hold interest rates steady when it announces its policy decision at 2:00PM eastern time.