The extraordinary volatility of the wholesale gas and power markets remains in place with even greater extremes being seen, particularly on the highest risk Winter 2021 gas season. We finally saw what looked to be a correction in the market when Vladimir Putin indicated that Russia would be able to flow more gas West for the coming winter – this caused a swing in gas wholesale equivalent to 5p/kWh on 6^th October alone. However, whilst willingness was indicated, there have not been increased flows as of yet, and the associated risk has sent prices higher again. At the same time, winter weather forecasts have indicated colder conditions are due, so gas worries are heightened. Hence at present, all traders are closely focusing on Russia’s next move. Should Russia’s own storage issues be resolved by November, then the hope is more gas will be available for Western Europe – this will compensate for European storage levels that are still well below average. If this to happen, then there could be a step change in pricing. However, this is a big if.

The short-term market has been relatively calm compared to the Seasons / Annuals – a greater output from wind farms and much milder than average temperatures for the start of October have given some respite.

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