Power Annuals received a boost from a sharp increase in EU Carbon allowances. This cost is factored into wholesale generation, so the key April ’18 curve hit £50/MWh and October ’18 hit £48/MWh. Prices were also boosted by oil breaking $70/barrel again. Meanwhile, short-term first spiked on the second return of the Beast From the East, although prices have since retreated as milder weather sweeps across Europe.

Gas has shown a similar pattern to power, although it showed a slight downtrend after the Easter Bank Holiday weekend. Prices have typically been buoyed by oil, and there has been bullish sentiment following another extraction cap confirmation at Groningen. With increased carbon costs, so gas becomes a far more attractive electricity generation feedstock over coal due to its cleaner emission profile. As such, gas annuals have received more support. However, as with power, improved weather forecasts have cut demand and so short-term has eased.

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