Last week we saw prices falling, which was a welcome relief after some fairly significant increases over the week or two before. The main driver for this was a drop in demand due to warmer weather and also a healthy imports from Norway, which helped make sure that the gas system was long. And there was quite healthy renewable output as well. So all in all a lot of downward pressure.
Further along the curve, we saw prices fall as oil prices fell off, the oil prices mainly dropping due to increases in productions from Saudi Arabia, who were responding to some issues with Iran, which have been reported before. So all in all, across the board a drop in prices, which is very welcome.
Looking forward into the coming weeks, initially forecasts were for continuingly benign weather, which helped keep prices down last week. However, this week is a little bit colder than anticipated. And we’re seeing demand ticking up today, which is likely to impact on prices. Also, all eyes are very much looking at the situation with the nuclear power fleets, nuclear stations currently off the grid due to the safety concerns that I’ve reported before. They are due to come back on, and if that does, that will have a positive influence in terms of keeping prices suppressed. But if they don’t come back in, that will certainly contribute to anxiety in the market, which is like to push prices up.
We’re also at that point in the month when economic forecast information is going to become available. That will obviously have an impact on prices. Particularly, we’re also looking at the political situation with regards to Brexit and whether or not a decisions been made about deals. If they can’t be made, that’s bound to have a negative impact on the pound. And when the pound loses value, that usually pushes energy prices upwards.
So all in all, I think the general direction could be up if there are issues around the nuclear power stations and certainly if things don’t go well in the European debate.