Despite the instability in the global energy markets, Power prices in the long term have remained surprisingly stable. However in recent months the unseasonably mild weather has reduced demand across Western Europe which has resulted in fallen power prices.
For example, April 13, the annual UK power slipped beneath £51/MWh (Over the last year it went as high as £55.3/MWh and as low as £48/MWh), while Day-ahead fell to £43.5/MWh from £50/MWh in mid-December.
It had been initially anticipated that the market was mindful of the ‘Fiscal Cliff’ negotiations in the US, nevertheless sealing the deal there, only resulted in some minor uplift to the UK power prices at the start of the New Year.
A cold start to December pushed Day-ahead prices above 70p/th for the first time since February 2011’s big freeze, but a mild Christmas period pushed consumption well below the seasonal average.
This in return improved confidence about gas stocks and supplies for the rest of the winter and in doing so eased prices across the board, with many periods close to three month lows.
In addition the US Fiscal deal has led to a wave of economic optimism and fresh oil gains, leaving the UK gas prices shunting higher as the New Year began.