UK forward gas and power prices largely shrugged off a collapse in oil prices (and financial markets) early Monday, with Summer ’20 UK gas and power discussed just 3.5% and 2.5% down on Friday’s closes respectively – despite losses of up to 30% on oil and 8% on stock markets. Oil plummeted on news that Saudi Arabia has launched an oil price war after talks with OPEC and Russia, aimed at extending oil output cuts, broke down, while intensifying coronavirus fears also contributed strongly to the tumble across global markets. Oil has since rebounded slightly – and at $36/barrel – is now down around 20% on Friday. UK gas and power prices beyond Summer ’20, which are arguably more affected by oil prices — due to the 6-9 month lead-time in some European long-term gas supply contracts that are index-linked to oil — appeared to be down by slightly more, but in very thin discussion. Summer ’21 NBP offers, for example, fell as low as 30.75 p/th and bids as low as 30 p/th – valuing the period 5% down on Friday.

 The part of the UK gas and power markets that in fact slumped the most today, but for entirely different reasons, was the short-term market, with Day-ahead gas and power down 10% and 12% respectively — at 22.75 p/th and £28.90/MWh — as much windier and warmer weather boosted wind power output and suppressed generator and end-user gas demand.