Energy markets moved higher through mid-May, as stalled peace negotiations in the Middle East and tightening LNG supply conditions continued to support gas and power prices.
Nuclear and renewable generation both declined during the first half of May, tightening overall electricity supply.
Longer-term power prices saw only limited movement, as markets remain uncertain about whether current supply pressures will persist beyond the near term.
Greater reliance on gas-fired power generation added further upward pressure to UK electricity prices.
Gas prices rose in recent weeks as progress on Middle East peace negotiations stalled, maintaining upward pressure across energy markets.
LNG supply into mainland Europe has started to tighten, with lower imports and slower storage injections increasing concerns ahead of winter.
Despite supply concerns, gas demand has remained relatively subdued due to mild weather and lower seasonal consumption levels.
Markets are expected to remain sensitive to developments in the Middle East, LNG availability and European storage levels. Forecast warmer temperatures may reduce gas demand later this month, although lower wind generation could continue to support power prices.
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