Slightly warmer temperatures could lead to a drop in gas demand and a “slide” in gas prices, suggests the weekly market report from npower.

On the other hand carbon prices could “edge up” after the European parliament’s vote on the EU Emissions Trading System.

Ben Spry, Optimisation Desk Manager for npower said: “Weather in the latest temperature forecast will continue to drive the market on the short term, especially for gas, with [domestic] demand set to dip below 200 MCM (million cubic meters) this week. With the supply outlook already looking good this could see prices slide lower.”

But comparatively colder temperatures forecast for the northwest could see a narrower spread between the UK, Belgian and Dutch markets, he added: “Keep an eye on the European situation, we are expecting cold weather in Europe and this could mean that the UK does start to export a little more gas.”

Looking back at prices last week, strong starts for power and gas prices were gradually “eroded” by the end of the week, he added.

Mr Spry said brent oil reached “10-week highs” last week and got to around $111.50 by Friday due to a number of factors: “We had better manufacturing data out of both the US and China so a little bit of a lift for the economies there but also crude stocks showed a larger draw than expected and this did really support prices through the week.”