Weekly Energy Report – Week Ended 09 December 2016
A predominantly bearish energy market last week – gas prices falling off through most of the week and power generally following. Friday saw the start of a recovery which has fed through into pricing in the following week.
Gas and Power
Many factors contributed to a weak market. Primarily the above average temperatures contributed to an oversupply of gas and a strong pound also helped push prices down. On top of this, positive news about the French Nuclear fleet and the return of output from the Rough storage facility helped keep prices depressed. By Friday though there were signs of recovery as the system moved into undersupply and increases in oil and coal futures helped push prices up.
A further OPEC meeting over the weekend has boosted confidence again in crude oil which has risen and energy prices have responded.
The impact of the recent OPEC meeting this time is clear but still challenging to predict the impact of when and how quickly things will happen as the previous OPEC meeting where production caps were agreed, had the opposite effect. Common sense would suggest that if the caps on production are delivered, it can only have a positive impact on oil prices and that that in turn will impact energy.
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