Business Energy Market Brief - Mar16
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Energy Market ReportsBusiness Energy Market Brief - Mar16

Business Energy Market Brief - Mar16

Jamie Flanagan

by Jamie Flanagan 01 March 2016

Report Summary:

Power and gas prices at nine-year low

key-market-indicatorsBusiness Energy Market Brief - Mar16

Most seasonal UK power and gas prices continued to fall in February, despite a boost in oil prices.

Seasonal gas contracts remained at their lowest levels since 2007, as a strong UK gas supply outlook offset rising oil prices. Total’s £3.3bn Laggan-Tormore gas project has entered production, and once operational the fields are expected to produce enough gas to supply 8% of the UK’s total consumption.

In addition, LNG delivery to the UK is already at a five-year high this winter. Summer 16 gas dropped 4.7% to average 28.0p/th.

Seasonal power contracts showed diverging trends. Summer contracts followed gas and coal markets lower, while winter contracts were supported by tightening supply margins following the likely closure of multiple coal-fired power stations. The summer 16 power contract fell 4.8% to average £31.5/MWh, but winter 16 power gained 1.9% to £37.9/MWh.