Mild November weather has put bearish pressure on the prompt and the balance of winter power and gas contracts, says npower.
Magali Hodgson, Optimisation Desk Manager at npower said: “The continued mild weather did put some bearish pressure on the prompt and the balance of winter power and gas contracts.
“We are still yet to see short-term temperature forecasts dropping to levels normal for this time of year. This unseasonable warmth, combined with healthy LNG and storage levels, all weigh on the prompt and balance of the winter contracts. If and when we do experience a cold snap, prompt and near curve power prices will be expected to spike.”
Economic problems in Europe are affecting markets similarly, with oil prices dropping. Mrs Hodgson added: “Last week, continued unease around the future of the Eurozone, tensions between French and German leaders, and the auction of French and Spanish bonds weighed heavily on the market, with Brent oil prices losing $5/bbl over the week to close just below $108/bbl.”