It is no surprise to report that energy markets have taken a hammering over the last fortnight, with the April ’20 Annual contracts going off the board at record lows. There is consistent bearish pressure associated with the coronavirus and the collapse in oil (which is partly a side-issue), alongside temperatures consistently above the seasonal norms. Plentiful European gas supplies from storage, the North Sea and LNG being diverted here due to a drop in Asian demand means that prices are weak across gas and power. There is some possible indications of recovery if we look further out, as whilst forward seasons have also dropped, their falls have not been to the same extent as seen for April ’20, which would indicate an expectation of returning demand in the coming months.

The isolation lockdowns seen across the world and the associated slowdown of business have seen a massive fall in energy demand. The global economy slowing and likely to fall into recession will most likely mean energy prices remain near their current lows for some time. There is potential bullishness from the surge in oil over the last couple of days, with a possible deal on the cards for Russia, the US and Saudi Arabia to stabilise prices. However, it should be noted that this surge has come off 18-year lows and that Brent crude currently sits just below $33, having been near $70 as recently as January.

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