Annual gas and power prices have been trading sideways in the last week, holding below their early November multi-year highs, but still above their levels going into the winter.
There remain concerns over the supply-demand balance for energy this winter. The UK went through the last cold snap with minimal difficulties and looks set to go into next weeks below-average temperatures in a similar state.
The gas system has been oversupplied for large parts of the last week, helped by an ease in demand. Consumption has started to rise towards the end of the week with the onset of the cooler temperatures. This has been more than offset by an increase in imports from the Continent. Near-term supply prospects have also been helped by an improvement in the LNG delivery schedule, with four tankers now booked for the month and another one possibly on-route.
Power supply margins have also improved from earlier in the month. While there has been a delay in some of the French nuclear plant returning to service, overall availability has improved enough to mitigate its need for UK imports. This, and a return to more seasonal normal weather conditions have helped to cut demand. However, the weather forecasts for next week are contributing to National Grid predicting a jump in demand of 2 to 3GW, which has been the scale of the supply margin recently. It is suggesting that tighter margins are possible in the near-term.