Oil prices climbed to nine-month highs in February pulling electricity and gas prices up with them. However gains in power contracts were limited by further falls in carbon prices. Annual gas and electricity prices began to pick up over the month, and they are now close to levels seen in September 2012. The main driver of the increase has been the surge in international oil prices.
Month-ahead Brent crude increased 4% to a monthly average of $116.4/bl as Opec lifted its oil demand growth outlook for 2013 as a result of renewed economic optimism.
As a consequence the annual gas contract rose 2.1% to a monthly average of 67.6p/th. The annual gas price has climbed 10% since July, but it is still down 1% on last year.
Electricity was more muted. The annual April 2013 electricity contract climbed 0.7% month-on-month to average £51.8/MWh. But the annual power contract is still 3% lower than this time last year.
But carbon prices tumbled even further, following continued uncertainty about EU measures to increase the price of emissions by withholding allowances from the market. Annual carbon dropped 15% to a monthly average of €4.7/t.