European natural gas and power prices have dropped back over the past week despite a cold spell adding to heating demand in Northern Europe, Danske Bank's FX analyst Mohamad Al-Saraf reports.

Gas prices to remain elevated throughout the year

"Wind turbines have been producing recently, which has helped balance the European energy market. Another reason could be continued draw on natural gas stocks to cover the additional demand. The drawback is depleted stocks that are now only 43% full and 20pp. below the level from the same time last year - a factor that will likely keep prices elevated throughout the year."