Both gas and power markets over the last fortnight have been dominated by issues in the French nuclear industry. Shut downs, break ins and earthquake damage risk mean that several reactors are going offline. This has created a lot of nerves across European markets, with fears over generation output much akin to Winter 2016 when French nuclear issues also drove sentiment. There has been the inevitable knock on to winter 17/18 gas costs as generators look to non-nuclear alternatives. Other commodities – oil and coal – are firmer and have thus lent additional bullish sentiment.    

Further out we are seeing backwardation becoming more and more pronounced, as forward gas and power curves (April and October 2019) are at a discount to April ’18. This is in spite of National Grid coming out with positive reports on capacity margin for the coming winter.

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