Wholesale Gas and Electricity prices rose slightly on Friday, but ended up the week significantly lower than they were at the end of the previous week.
There is limited pass-through of these reductions to retail, as a lot of the reductions had already been built in to supplier pricing. However, our view remains that there is limited scope for further significant reductions in the coming months, albeit that by this time next year we do expect prices to be lower than they are now, and therefore continue to recommend 1 year contracts as being in our client’s best interests.
| Gas: Gas prices rose last Friday. Dragon LNG is operating at half capacity due to maintenance. A decline in future forecasted wind generation supported prices in the prompt. Power: Power prices moved upwards at the end of last week, following the gas market. The 2GW IFA1 interconnector between France and the UK was operating at a reduced capacity. Unexpected high wind generation brought down prices on the Day-Ahead contract. Oil: Oil prices were volatile at the end of last week, with Hurricane Beryl moving upwards through Texas. Minimal damage to oil infrastructure eased concerns of potential production cuts in the Gulf of Mexico. Carbon (EU ETS): The ICE Dec-24 found some support and rose to €69.19/t last Friday. The contract is currently trading slightly downwards at €68.56/t this morning. Carbon (UKAs): The ICE Dec-24 continued its bearish run at the end of last week, eventually settling downwards at £40.77/t. This contract is currently trading at £77.75/t at the time of writing. |
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