Gas and power markets have seen a degree of correction in the first two weeks of November, a welcome change from the sharp upturn of the past two months. Both Short-term and Long-term markets have seen a reversal, as milder weather has helped bring down the prompt market, the recent driver for all gas and power curves. This drop has come after day-ahead electricity reached a 10 & ½ year high early this month when the system was tight, with cool weather and light winds.  Encouraging gas flows and LNG deliveries have improved things, as has talk in France that the nuclear outages might not be as bad as first envisaged.

At the same time, the feared rise in Brent Crude on an OPEC production cap has failed to materialise, with agreed limits looking less and less likely – hence prices have dropped back. The election of Donald Trump could also herald increased US oil production as his administration is expected to be pro-fossil fuels, again countering any OPEC stabilisation attempts.

Will Bridge, Head of Procurement

Back