UK energy prices fell sharply in November 2016 with UK NBP natural gas month ahead prices dropping 7.1% while UK electricity baseload month ahead prices crashed 13.4%, easing from levels not seen since November 2008 amid improved supplies, falling Continental electricity prices, plunging carbon prices and rising GB pound. Increased natural gas flows from Norway and Continental Europe, improved shipments of liquefied natural gas entering the UK from Qatar and Centrica announcing the Rough storage would resume withdrawal operations from 9 December after an outage put pressure on UK NBP natural gas prices. Further falls were capped by rising U.S. natural gas and global LNG prices amid increasing crude oil prices, reduced U.S. production, forecasts for colder weather and growing heating demand in China, Japan and South Korea. Cold temperatures and elevated domestic heating demand at the end of the month also provided support, however warmer weather forecasts for the beginning of December weighed on prices. UK electricity prices were subjected to larger falls as the GB pound strengthened and the European electricity prices fell after several French nuclear reactors were approved for restart. Brent crude oil prices rose 4.8% after OPEC and Russia agreed to cut oil production by 1.2 mbpd to 32.5 mbpd in order to rebalance the oversupplied global oil market. This was despite the rising U.S. dollar, U.S. crude oil stocks building 5.6 mbbls and the Baker Hughes oil rig count increasing by 33 units over the month. European thermal coal prices rose 1.2%, while Chinese coal prices crashed 29.6% as China's state planner moved to ease the existing production curbs ahead of peak winter demand for heating fuels. Carbon emissions plunged 24% amid weaker energy prices, technical selling, weak auction results, news that more EUAs could be auctioned in 2017 by Poland and the announcement of the EU Climate Commissioner about a new EU ETS policy push. Last month, we expected UK energy prices to reverse direction and to see a meaningful correction to the downside (10-15%). This is exactly what happened and we now expect further falls, albeit less pronounced, due to improved supply and a stronger GB pound. The UK NBP natural gas and UK electricity baseload month ahead prices are expected to fall additional 10%, while further dated contracts (Sum-17 onwards) are expected to fall less than that (between 3% and 5%) with support provided by rallying crude oil prices, which may also fall as producers outside OPEC may ramp up production and/or some OPEC countries may fail to deliver their anticipated production cuts.