Last week saw oil fall to it’s lowest level at close on $40 per barrel and then bounce back to nearly $46.  The gas and electricity markets reflected this bounce with wholesale prices jumping by some 10% to 15%. 

A spate of unplanned plant shutdowns and colder than normal weather caused the electricity market to ramp up as supply margins became tight.  The cold weather and erratic Norwegian flows together with falling storage volumes helped to cause the gas market to climb. The market sentiment however is still predicting a continuing fall in the short term, as the Met Office are predicting milder than average weather in January and February, and then a gradual but volatile rise in 2009.

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