The pound has fallen to multi-year lows against both the euro and the dollar following last week’s announcement that the UK will begin the formal Brexit negotiation process by March 2017.
This supported gas and power prices as imports became more expensive, according to Inenco’s Y Report.
Supply margins tightened significantly due to a number of nuclear outages and weak renewable generation.
The price of oil stayed above $50/bbl (£40.7/bbl), supported by OPEC’s announcement the nations are willing to cut production.
However, Iraq’s oil minister has announced the country is hoping to increase oil production over 2017, casting doubts over the initial OPEC production cut.
Energy Trader Rebecca Hermolle said: “Prices rose last week following the weakness in the pound and due to the unfavourable supply and demand fundamentals. However, fundamentals have returned to balance this week with the UK gas system forecast oversupplied. This is due to increased flows from Norway and the Netherlands and we’ve also seen increased renewable and nuclear capacity in the power market.
“Those people with fixed-price contracts, you could look at fixing your contracts now and taking a position during this dip in the market. For those of you with flexible contracts if you have a relatively low hedge you could increase your hedges during this dip as prices are expected to be relatively volatile as we move further into winter 2016.”