Whilst Markets continue to ease, there are signs that costs may now be levelling out. This trend is more evident for power than gas.

Nearer curves are trading at a discount to future. This is predominantly due to greater bearish influences in 2019, such as the mild start to the year that has left much winter gas storage untouched, the record deliveries of LNG to Europe as European markets offer greater value than Asia, and declining coal costs in the face of an expected reduction in Chinese demand. Future curves are much more influenced by oil, with the Brent index nearing $70 today for the first time since mid-November. Brexit continues to have an influence on energy, with the carbon market volatile due to the uncertainty of the UK’s position on European trading should ‘no deal’ prevail. Today’s indications of a possible softer Brexit means that Sterling is fairly steady around €1.17, so no additional price pressure on energy imports.

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