Worryingly, the market ticked up yesterday despite hard evidence that mild weather is on its way. Although fundamentally demand is down a little, supply is still a big issue, and continental prices and gas prices remain high and so in order for the power market to account for these changes buyers are going to have to pay up. The market has few sellers and many players are still short on a forward basis, large industrials are playing in the day ahead market, and some of the larger utilities are still buying quite large volumes to cover some net shorts.

The gas market has been active and controlled, with a few more options being traded and a general view that there is little to push the market downwards. If long term weather remains mild for two to three weeks expect some sell off but it will be a gradual trickle rather than a dramatic collapse.