ELECTRICITY MARKET UPDATE

electricity market Update

The expected return to the grid of the Dungeness nuclear unit, as well as capacity at six coal plants tomorrow has weighed the Day-Ahead down below its last assessment this morning.

Yet, the downward shift has been fairly small as temperatures are expected to drop below seasonal normal levels on Wednesday which has buoyed the demand forecast.

Moreover, wind output will decline significantly tomorrow, whilst the Torness nuclear unit will suffer a one day outage.

Near curve contracts have also been under the control of the bears, in response to a new longer-term weather forecast predicting temperatures above seasonal averages for much of February.

Negative signals have fed through from equivalent gas contracts as well, and so the drop in price is greater than on the prompt. At the end of the curve the bearish trend in electricity market prices persisted mainly driven by earlier weakness from the Brent Crude benchmark product.

Brent dropped below its close point this morning in reaction to various banks lowering their oil price forecast for 2016, although news that US shale oil production should fall for the seventh month in a row during February has led to the commodity rising back to its previous settlement.