Ten day power decline reverses on bullish oil market

Thursday 18th May 2017

The general downtrend in gas and power annuals that we have seen since January continued in the first two weeks of May, with October ’17 power nearing £41/MWh for the first time since mid December and gas annuals at seven month lows. There has been some correction to this trend in recent days following a reversal in oil sentiment – there has been expectation that the OPEC cut would be maintained, but a joint Russian / Saudi declaration of extending out to March ’18 seems to have bolstered global energy sentiment. However, as I write, the weekly US inventory figures indicate an oil glut, so oil may be back in reverse.

In spite of some volatility, falling markets seem to be in place. This position is supported by well supplied gas and power markets moving into the summer.