Short-term power market movements have dominated energy trading in the last fortnight with Day-ahead doubling from a 9-month low to a 5-month high. This came off the back of power station outages just when the heatwave hit and cooling demand thus peaked. Annual markets by comparison were much more subdued. There is a general bearish influence from gas on power considerations, but this has been countered by firmer continental electricity prices and by coal and carbon pushing up.

An announcement has been made that the UK’s largest gas storage facility -  Rough – is to be closed down. Rough has accounted for 70% of the UK’s storage so you may expect the closure to have some bullish effect on the gas market as storage concerns ramp up. However, the markets have largely ignored the announcement with the disruption at site over several years already factoring in any knock on effects. There may be some seasonal tightness moving forward with Rough permanently offline, but there is no underlying panic.

Oil is showing some volatility too, dropping to a seven-and-a-half month low ($45.50) on significant Nigerian and Libyan output, only to crank back up towards $50 as US production apparently slows.

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