Markets see decreased demand towards end of February

Monday 6th March 2017

Markets have generally continued to decline through the last fortnight of February, shrugging off concerns over Rough storage and the OPEC oil production cut. The main driver at present is the weather. It is both milder and windier than anticipated in earlier modelling, and this equates to decreased demand in the UK and also across Europe. The strong Atlantic storms at the end of February meant that a remarkable 20% of the UK’s power was wind generated. Coal and Carbon prices increased, giving some upward pressure to power, but this influence has since lessened.

Whilst the OPEC oil production cut is still holding, with members more or less keeping to the quotas allocated, the increased price of crude has seen US production increase, flattening the price of wholesale and thus diminishing its influence on global energy markets.

Gas deliveries remain strong in spite of unplanned Norwegian outages. There have been renewed Liquefied Natural Gas (LNG) deliveries to the UK and more are expected this month as Asian prices fall.