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Energy Prices (early November 2013)

Electricity: Oil prices have fallen to a 6 month low, further weakness in that market could impact others, including UK power. The return of the Britain-France interconnector should lead to more flows coming from mainland Europe to the UK.

The average peak demand forecast for early November has risen sharply in a week, from 44.8 GW last week to 48.3 GW. Centrica is likely to cancel plans for a wind farm at Race Bank, claiming government subsidies are too low.

Gas: Gas production has started at the West Rochelle field in the North Sea. The UK government has lifted the production ban on the Rhum field, the field previously yielded around 4% of the UK gas production. The co-owner BP says it is too early to say when the field will re-open.

Temperatures are forecast to drop, which could push demand higher especially as the Norwegian maintenance issues continue. UK gas production continued to decline with output falling 9% year-on-year, total imports also fell by 11% over the same period.

Summary position:

Oil $106.79/barrel

Coal $82.15/MT

EUA 14 €4.76/TCO2

Gas 66.55p/th Apr 14

Gas 65.35p/th Oct 14

Electricity £52.08/MWh Apr 14

Electricity £53.30/MWh Oct 14