Power prices volatile after January falls

Thursday 22nd February 2018

Markets over the last fortnight have been up and down, predominantly due to changing weather patterns across Northern Europe. As the weather has cooled, so gas demand has increased with normal domestic heating requirements. However, gas demand for electricity production has also increased, as weather patterns change and Atlantic winds drop, cutting renewable generation. In spite of this bullish pressure, there has been bearish sentiment from oil dropping back dramatically from the $70 levels hit since Christmas, with daily decreases in the Brent index on eight of the last eleven days. This is on expectation of increased US production. However, at the time of writing, oil is up on a weaker dollar.

It looks as though the weather will continue to dictate sentiment in the short term, with cooler forecasts for the rest of this week and into early March.