Energy Market Risk Analysis | Early November 2017

Annuals claw higher on oil, cold

UK power prices generally clawed higher again as October rolled into November, after having been pulled lower at the end of the third week of October as French nuclear supply fears retreated. Firmer oil and coal markets have helped push the Annuals to new long-term highs, while the onset of colder weather has underpinned the uptrend.

April ’18 Annual has climbed back towards £46/MWh, its highest level since it started being discussed in July 2015, October ’18 Annual tracking it at a £1.2/MWh discount.

Winter is coming; Day-ahead hits 49p

A first taste of winter weather has pushed UK short-term gas prices to a new seven-and-a-half-month high, also helping – alongside firmer oil prices – to nudge longer term prices up again.

Annual prices initially continued to rise as the second half of October got underway, but they then dipped over the course of the third week, partly on the back of a reduction in fears that extended outages at French nuclear plants could boost continental gas demand.

Energy price shift between 15 October 2017 and 02 November 2017

Elec: +1.2%

Gas: +0.59%

Coal: +5.31%

Oil: +7.97%
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