Energy Market Risk Analysis | mid March 2013

Short-term spikes again – to £71

Short-term UK gas and power prices witnessed another price spike on March 13th − the most significant yet in the recent series for UK electricity, as Day-ahead reached £71/MWh, a 13-month high. A cold snap in the face of tightening supply margins and operational issues at the UK’s largest gas storage site contributed to the price squeeze.
Day-ahead has since retraced lower, but at around £55/MWh still remains £5 higher than average levels so far this winter, as strong gas prices and low wind generation continue to provide support.

 

 

Rough cutbacks trigger new spike

An unplanned outage at the UK’s largest gas storage site, Rough, led to gas withdrawals from the facility being cut by 25% in the second week of March, just as UK demand roared higher as snow and freezing weather swept across the country again. With Rough being such a crucial source of gas while LNG imports remain low and Norway faces extended production outages, the cutbacks left the market struggling for supply and catapulted short-term prices higher.

 

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Energy price shift between 06 March 2013 and 17 March 2013

Elec: -0.31%

Gas: -0.28%

Coal: +0.16%

Oil: -0.83%
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