Weather forecasts cause third surge in prices.
Tuesday 20th March 2018
As was the case at the start of the month, the weather is having a significant bearing on energy and gas prices. Whilst volatility is pronounced on the Short-term market as was previously the case, the bullish sentiment (in the face of the expected return of The Beast from the East) is now showing on Annuals, with April ’18 power hitting its highest level since the first French nuclear crisis in 2016.
In terms of physical gas supply, this seems to be robust, in spite of the lack of UK storage. There are good flows from Norway, and two LNG cargoes from Russia have recently been delivered. Whilst UK-Russia relations turn sour, this is not expected to impact on gas imports, and it should also be noted that the UK is also looking a viable market for American LNG as well. Nevertheless, the consistently cooler winter across Europe means that gas stock replenishment this summer will be more significant than has been typical in recent years, potentially giving some weight to gas pricing.