Weak gas sends power prices lower

Tuesday 16th May 2023

Markets remain bearish – the short-term is the key driver for power and gas, but sentiment is evident across Annuals too. The change from 2022 is dramatic, but as has been previously mentioned, prices are still much higher than pre-Covid levels.

Markets are easing as we enter a mild spring with warmer, brighter conditions cutting demand. Gas availability and storage levels are pushing wholesale levels lower – the sustained storage percentages carried over from the winter mean less summer top-up is required, and LNG is still coming into Europe in significant volumes, including to new floating facilities off Italy and Germany. It is even noted that infrastructure in the UK is at near-capacity for gas and that there may now be diverts to Japanese and Korean markets although the overall abundance means this is not a major concern. Prices have been somewhat sustained by North Sea production disruption, a normal seasonal occurrence as maintenance kicks in. Overall however, markets appear set on a flat or downward trajectory.