Annuals fall back from late-November surge

Wednesday 4th December 2019

Gas and power Annual prices have moved down in the last week or so, following signs of a recovery in the third week of November. A lot of the sentiment has been driven by the short-term markets, where Norwegian gas outages combined with colder weather and thus heating demand pushed prices higher. However, improved gas flows, the previously discussed levels of European gas storage and a real glut of LNG means that a real sense of bearishness has returned.

There was some upward pressure from positive signs on the US-China trade talks, but that has changed since the US commented on the Hong Kong situation, riling the Chinese. There has also been oil-driven sentiment, with the OPEC countries and Russia expected to cut production again to boost the crude price, but the oil indices are yet to gain momentum. The new European Commission is now in place with a much greener agenda, but this only gave brief impetus to the carbon market.

In just over a week, we should have an election result which will have some bearing on energy prices to a greater or lesser extent, depending on the make up of the new government.