At the start of the week, the continued oversupply of gas kept prices down. However, that graded situation where the UK can start to export to the continent, which supported prices alongside a weakening pound. As the week progressed, despite the fact that the pound rallied, which would normally have a depressing effects on prices in the UK, colder temperatures and a forecast for a colder remainder of March lent a bullish feel to the markets and prices recovered.
For electricity, at the beginning of the week good wind and solar generation helped keep prices down. However, forecast decreased on wind generation, which once again helped it mirror the gas market and resulted in a bit of a recovery of prices.
Over the whole week, it would appear the prices have softened a little bit, continuing the downward trend that we’ve seen over the past month or so. However, prices seem to be evening out. Looking forward, it would be interesting to see what happens as solar power generation increases when we enter the summer period and as heating demand decreases as the weather warms up.
In the longterm, there remain concerns about oil prices. Certainly, there’s a lot of speculation that the OPEC countries won’t honour the quotas that were agreed to before Christmas. If that were to happen, then inventories of oil will increase, and that will have depressing effects on energy markets at a global level.
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