6 Holding Steady: But Winter’s Coming
The important message is this. Stability today does not guarantee stability tomorrow. As we move deeper into the colder months, it only takes a handful of changes for prices to shift quickly. In the next section, we will take a look at the various factors that will affect prices as we go deeper into winter. What Could Shift the Market Quickly
Colder than expected weather Even a short cold spell can push heating demand up across the UK and Europe. When temperatures fall below forecast, storage withdrawals accelerate and wholesale prices typically respond within days. Winter risk will not disappear until spring arrives. Weaker Wind Generation Electricity prices remain closely linked to wind output. High pressure weather patterns can bring still conditions just when demand peaks. When wind drops, the system turns to gas-fired power and any uplift in gas pricing is passed through rapidly. LNG delivery timing Europe depends heavily on LNG. Shipments run on tight schedules and delays, diversions or stronger bids from Asia can reduce available supply at short notice. Even a handful of cargoes shifting elsewhere, can tighten the balance and lift winter prices.
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