Having dropped back with the start of the second lockdown, energy prices have bounced on news of successful vaccine trials. As was seen across international stock markets, electricity and gas rose, alongside carbon, oil and coal. The increase in gas was more muted than power, with things easing back over the last couple of days – the reality is that lockdown has supressed the short-term market as there is less demand. Even with more people at home, there has not been not a domestic surge to take up the slack, as the continued mild weather has decreased heating demand. Energy demand will be key over the coming winter – most forecasts suggest a mild and windy start to 2021, so this should reduce demand further still. With supply outstripping demand, prices may get squeezed.

As the reality of Joe Biden’s victory became apparent in the US, so oil prices steadied. Ultimately, a Biden administration will probably signal more costly global energy as he has a greener agenda than the current President and will recommit the States to the Paris accord on emissions reduction, for example. However, this has not given a spike to energy markets yet, with cheap oil destined to remain for 2020 and beyond.

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