The downturn of gas and power Annuals has continued through the first part of November. This is due to various factors, but the key driver is a combination of record gas storage and revised milder weather forecasts for the winter. In contrast to this, short-term markets have been more bullish – gas heating demand has increased due to the first real cold snap of the winter; gas generation has also increased as wind speeds and thus wind generation have dropped. There was also some pressure from an upturn in oil, but this has since eased.

Overall picture therefore remains bearish. Whilst the general election campaign is now in full flow, we are yet to see this impacting on prices to any great extent – clearly the election result will affect energy prices, whether through a clearer position on Brexit with incumbent carbon and currency implications or the prospect of part-nationalisation of the industry (National Grid); we imagine there will be some more electoral influence on prices in the coming weeks.

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