Energy Market Risk Analysis | Mid November 2017

Bull-run intensifies – then breaks

While the recent bullishness intensified in the first fortnight of November, with Annuals rallying by as much as 4%, prices have buckled over the last few days as the factors that drove the market higher – colder weather, further French nuclear concerns and a surging oil market – all unwound a little.

In the run-up April ’18 Annual broke above £47.5/MWh, for the first time since it started being discussed in July 2015 (although still remaining below the front Annual prices seen in January). October ’18 Annual also reached a long-term high, above £46/MWh, before slipping back

Stronger Front Annual hits 29-month high

The front UK gas Annual – April ’18 Annual, the key end-user benchmark – reached its highest level since June 2015 this week, pushed above 49 p/th by an upsurge in global energy prices following Saudi Arabia’s anti-corruption purge and increasing tensions with Iran over Yemen, as well as a run-up in short-term gas values ─ on the back of colder weather. However, prices have since eased back, on warmer forecasts, a retracement in oil prices and reduced French nuclear power jitters.

Energy price shift between 02 November 2017 and 19 November 2017

Elec: +1.83%

Gas: +3.36%

Coal: -5.03%

Oil: +1.82%

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