Annuals rise as global lockdown eases

Tuesday 19th May 2020

Prices have generally moved up over the last fortnight as most countries look to ease lockdown restrictions. There are tentative signs that the global economy is picking up, with oil coming back from its recent lows and Asian LNG prices increasing. European power prices have been boosted by continued fears over French nuclear outages this coming winter, and the consequent gas burn that this would herald. Gas short-term remains weak on continued low demand during lockdown, and short-term electricity has again seen prices move into negative territory as wind generation exceeds expectation.

Whilst increased energy prices (and rising stock markets) are signs that the corner is being turned on C-19, there is obvious caution and things will probably remain volatile. European power demand still remains 9% below normal and is expected to stay supressed; a second wave of the virus will probably knock back prices; being post-Covid means that focus will return to Brexit – sterling has gone weaker versus the Euro during the crisis and a bad deal could weaken the currency further, bolstering energy costs in the UK.