Prices drop back as extreme continental temperatures ease
Friday 1st September 2023
It has been a much more benign couple of weeks across gas and power markets. The worries over Australian LNG strikes – whilst still very real – have been counterbalanced by the fullness of EU gas storage which is well ahead of schedule and de-risks a lot of winter pricing. We have seen dramatic downward shifts today in front-month prices in spite of the potential disruption the strikes will bring. The change in weather across the continent has also helped as we seem to have moved past the extremes seen earlier in the summer. This decreases short-term volatility and so gives comfort further out. French nuclear output increasing is a welcome addition.
Both power and (particularly) gas Annuals remain well above their recent mid-June floor, but it seems as if prices may plateau or ease back some more.