Market fundamentals prevailed over traders on Monday and the market saw significant drops

Wholesale electricity prices are now below their previous low point on 2/6/23 although gas is still single digit % points above that benchmark level

There will inevitably be some winter volatility as temperatures drop but given sluggish Asian demand, the good stocks of LNG plus 8 cargoes arriving in the UK in the next week, our position remains that the market fundamentals will rule over the traders and prices will continue to drop.

Gas: An expected drop in Gas for Power demand of around 42%, coupled with strong wind output and healthy gas flows from Norway all applied pressure to Prompt contracts yesterday. Port data indicates Britain should expect 8 LNG cargo to dock by 14th December.   Power: Power prices fell throughout the curve yesterday, largely tracking NBP movements. Benchmark UKA prices also declined adding further bearishness to the far curve. For today’s price outlook, as of yesterdays close, please see below.   Oil: Prices traded down for most of yesterday as demand concerns outweighed that of production cuts, with macro data showing there was weak manufacturing activity throughout November. In the Middle East, limiting losses, a further 3 commercial ships were attacked by Houthi Rebels in the Southern Red Sea.   Carbon (EU ETS): The ICE Dec-23 closed at €70.37 yesterday. Opening at €70.78/t this morning, the contract has been volatile but is currently trading down at €70.42/t at the time of writing.    Carbon (UKAs): The ICE Dec-23 fell to £37.27/t during yesterday’s session. The contract has yet to trade this morning.