Day and Month-ahead power hits £55/MWh

Wednesday 6th December 2017

We have had an interesting fortnight in the energy markets with changes in weather having a pronounced effect on prices. A cold snap at the end of November spiked short-term prices with gas demand up and wind generation down. This however reversed when December forecasts improved. Strong physical gas supplies also helped improve the picture.

Other commodities have had varying effect on power and gas with oil and coal edging up further. However, as these are priced in dollars, sterling’s relative strength tempered gains.

The French nuclear situation continues to cause worries, with restart delays, although the overriding influence of issues seems to be easing.

Generally, the positive Brexit news for the past fortnight has pushed the pound up, and so improved the outlook on UK gas imports. With yesterday’s near miss on a deal, so Sterling has dropped back. Hence the deal is intrinsically linked to the price of energy.