European Winter Freeze Could Push Up Energy Prices

European temperatures are set to drop to below-average levels this winter, which could push natural gas and power prices higher.

November is set to be a mild month for Europe, with experts predicting warmer-than-average temperatures across the continent, following nine months of mild weather.

The milder weather in 2014 has already hit demand for gas and power. In Germany, electricity use was down 3.9% in the first nine months of the year, according to the energy lobby BDEW in Berlin.

Meanwhile, month-ahead gas prices in the UK have fallen to their lowest level since the same month in 2010. Last winter was the mildest in seven years as the amount of gas in storage hit record levels.

UK month-ahead gas prices have fallen 20% since the start of the year and month-ahead German power prices have fallen 14% this year, Bloomberg reported, citing broker data.

Experts are predicting an increase in heating demand as the weather turns considerably colder than last winter.

Temperatures will be coldest in eastern Europe and Russia, according to Mike Shanahan, chief operating officer at WeatherBell.

Russia and Ukraine recently signed a deal to resume gas deliveries of natural gas to Kiev, eliminating the risk that Ukrainians will run out of gas in the cold winter months.

However, the two sides are yet to agree a permanent ceasefire in Ukraine's east, where pro-Russian separatists held elections on Sunday.

Kiev has decried the polls as a "farce," while Russia said it would "respect the will of the people" who voted in the polls. Rebel leaders are expected to emerge victorious from the votes.