Outlook for power
The UK’s most important gas storage site, Rough, is now just over a third full after extensive use during the recent colder weather. UK gas storage has been working flat out as a result of low LNG imports. If there is another sustained spell of cold weather, prices could increase significantly.
Furthermore around 5GW of old fossil fuel plant is expected to close in March, which could tighten electricity supply and lead to higher prices.
Opec and the International Energy Agency (IEA) recently published their latest Oil Market Reports – but they told different stories. Opec predicted an increase in oil demand growth over the year as a result of signs of global economic recovery and colder weather. In contrast, the IEA downgraded its oil demand growth forecast reflecting more subdued economic activity.