As we close off the April 2023 Annuals, we have seen an uptick in prices. There have been a variety of reasons for this including colder weather and a reduction of electricity capacity from the Norwegian interconnector. However, the biggest factor causing risk to be built in is the industrial action in France concerning the pension age. There have been widespread strikes, which have affected nuclear output and also have a knock-on for maintenance and refuelling in the summer. Whilst the French nuclear fleet has been under the spotlight on safety issues and running sub-capacity for several years, it still represents a key component of pan-European baseload. If anything happens to the nuclear stations, so risk factors have to be built into pricing. In the short-term, Spanish wind production has made up the shortfall of tightness in France, but there are clearly nerves further out.  Industrial action in France also caused disruption to LNG, again with knock-on effects elsewhere.

In a wider energy context, we wait to see if OPEC’s announced oil production cut will boost other markets – crude has surged over 5% this morning, and we wait to see if this will drag gas higher.

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