Following the Hamas attack in Israel and the subsequent response, prices surged as wider implications for energy security were considered. At the time of writing, the gas and power price spike has nearly reversed as strong generation fundamentals and warm weather dictate costs. A lot of the geopolitical risk that was built into pricing in relation to the Middle East has been removed, as LNG supplies to Europe have not been affected. Gas demand has also been off as the start to Q4 2023 has been much milder than forecast so lower domestic heating. At the same time windy conditions from the series of named storms mean wind generation is strong. Coal and carbon prices have eased in line with gas. There has also been some retraction in oil but not to the same extent as gas or power. Pricing remains volatile, particularly on the short-term market, but overall, benign fundamentals seem to be in charge at present.

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