Both power and gas markets have seen bearishness in the past fortnight due to a general decline in energy markets. There has been a pronounced reduction in oil prices, as American production and inventories increase, OPEC+ ups production, and the US grants sanction exemptions to certain countries purchasing Iranian oil. US oil output has increased to such an extent that it has now become the world’s largest producer. Coal has also declined and carbon has retracted from the highs seen in late summer.

The weather outlook has improved across Europe, so demand and storage fears have reduced. Mild and windy weather has reduced demand for domestic heating and electricity generation, thus improving the short-term picture. At the same time, a collapse in Asian LNG prices has seen more gas shipments heading to Europe, further improving the physical gas outlook.

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