(Bloomberg) -- Europe’s natural gas and power markets are tightening at the start of the season for peak demand, signaling more a volatile environment for traders.

Gas supplies have slipped because of outages and maintenance in recent weeks, eating into a glut that built up starting with last year’s warm winter. Power demand has bounced back from a slump during coronavirus lockdowns, shifting attention toward unexpected outages and how much wind turbines can generate.

Those factors explain why gas prices have more than doubled over the last two months and illustrate why traders are on edge as cooler weather bears down across the content, driving consumption of gas and electricity.

Following are the five biggest drivers for the energy markets this winter:

1. Gas flows

Natural gas flows coming from Russia -- the largest supplier to Europe -- have dropped 33% since the start of the year, and flows from Norway have declined 13%. Reduced supplies are set to keep driving the market in the next couple of months, according to Giacomo Masato, an analyst at Marex Spectron Group Ltd.

“This winter will almost certainly be much tighter than last year. There’s a good chance it could be also tighter relative to the last ten years,” said Masato.

2. Weather

At the moment, forecasts point to normal weather in the next two months. That would deliver a big boost for demand from last winter, which was the warmest on record in Europe.

“If we see an early cold snap, in November or December, then we might have a bullish pressure,” said Niek van Kouteren, a senior trader at Dutch energy company PZEM NV.

This chart shows European gas storage almost at maximum capacity, suggesting that for now the market has a buffer to cope with a cold snap:

3. French nuclear availability

Nuclear output slumped over the summer in France after a collapse in demand for power and maintenance delays related to the pandemic. With atomic energy generation still below the five-year average, the French grid operator is bracing for possible supply crunches. Lower-than-usual availability of nuclear plants leaves a “high probability” of supply-demand tension at the end of November and start of December, RTE said.

This chart shows how low French nuclear generation fell this year:

4. LNG Supplies In Europe

The market for liquefied natural gas tightened over the past month as consumption rose in Asia and supply plants went offline from Australia to the U.S. At the same time the Norwegian export facility has been shut since last month due to an outage and then a fire.

Europe, with its liquid trading hubs and numerous import terminals, usually absorbs excess LNG. Deliveries have dropped with less slack in the system but are expected to bounce back soon. Global shipments from the U.S. slowed in the summer when prices were low but are now reviving.

5. Carbon prices

After coming within a whisker of a record high last month, carbon prices are braced for a pair of political events this winter. Prices could gain further from indications that national governments plan to approve the European climate law on net zero and its proposal to reduce carbon emissions by 55% by 2030.

“We are cautiously optimistic and see room for EUAs to creep back above 30 euros before the end of the year,” said Jahn Olsen, analyst at BNEF.

©2020 Bloomberg L.P.