As we move deeper into the winter and see the first glimpses of spring, so the downturn in energy wholesale shows no sign of reversing. In spite of the odd increase on colder weather, the trend remains distinctly bearish. We have also moved into backwardation again where October ’23 and April ’24 Annual curves are at a slight discount to April ’23. The milder weather conditions no doubt help as domestic and generation gas usage shrinks, instilling confidence in the storage levels that remain. Wholesale values for April have fallen in the region of 25% since the start of the year. A general correction was of course needed as the prices seen over the last year are unsustainable. It will be interesting to see just how far the correction goes – there is of course a premium to add in as long as Russian gas remains off the table, but there is the sense that too much risk was built in to account for this. In the wider context, we are seeing carbon costs come off their recent highs. It is only really crude oil that is moving upwards with Brent crude now back above $85 per barrel – this will no doubt slow the speed of the downturn across gas and power.

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