Annuals hit 7.5-month high

Firmer UK power and gas prices have been seen across all periods over the last fortnight ─ Annuals rising to their highest levels since late October on the back of predictions of tighter winter margins following recent plant closures, persistent gas supply issues and oil market strength, while short-term levels have been bolstered by low wind farm output and the quicker-than-expected closure of one coal-fired power station.

Dutch cuts and Brexit lend support

For the first ten days of June longer-term UK gas prices followed an arc in oil prices, but then as oil prices continued to curve lower gas prices unhooked themselves and rebounded ─ on expectations of further output cuts at Europe’s largest field, Groningen, and a fresh rally in short-term prices in the face of a new rash of Norwegian production outages and a sharp drop in LNG deliveries. Some pre-Brexit referendum buying was also reported, amid a perception that a weaker pound following any “Leave” vote could push up prices by raising gas import costs.

Energy price shift between 02 June 2016 and 19 June 2016
Elec: +5.43%	Gas: +6.34%	Coal: +5.39%	Oil: +0.98%

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