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COVID-19, Brexit, LNG supply - EDF s James Chaplin explains what s affecting the UK Power Market this winter

So what have we seen so far and what are the risks ahead? The LNG market has been particularly tight with La Nina bringing prolonged cold weather to Asia, whilst supply disruption has hindered Australian exports. We saw the spot Asian LNG price reach a peak of c.290p/th (3.5x higher than UK) as buyers scrambled to attract cargoes amid fears storage would run dry. As a result LNG supply has been diverted away Europe and towards Asia. The tight LNG supply market along with cold weather in Europe caused gas prices to rocket in Europe, with the UK February 2021 contract reaching over 83p/th on 12 January, a rise of almost 100% since the start of winter.

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