Recent gas and power discussions have been dominated by short-term markets. Gas prices reached record levels last week, and this surge was reflected in day-ahead power too. The cost increases came as the ‘Beast from the East’ struck Western Europe and gas demand increased significantly. At the same time there were unexpected Norwegian outages. All in all there was near record UK gas demand and prices temporarily doubled. Concerns over gas availability featured on the national news which whilst somewhat alarmist, did again highlight the limited storage back up in the UK now that Rough is closed.

What was striking as short-term surged was the distinct lack of impact on Annuals, even the near April ’18 curve. Very little bullish sentiment was seen on both gas and power Annuals, with other fundamental drivers – coal and oil – having far more influence on cost considerations.

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