Wholesale gas and power prices have continued to rise through the first part of May, buoyed by the elongated heating season affecting gas demand and slowing gas storage replenishment. Supply issues – limited Norwegian and Russian flows – have also caused concern. As well as being cooler than average, the weather has also been still, meaning wind generation has been limited. Gas prices have also been sustained through increasing Asian demand for LNG.

At the same time, the purchase of carbon credits has continued, with new record high costs hit – the green recovery and post-COVID confidence have driven this.

However, at the time of writing there is the hint of a reversal, with better weather forecasts and a retraction in European carbon prices. The UK Emissions Trading Scheme has also started this morning, so this may cause more price correction. There has also been some influence from lower oil prices, amid demand concerns over rising C-19 cases in Asia.   

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