On Thursday wholesale prices continued to drop, albeit not by very much, which was welcome.
In terms of generation – see lower table – less than 40% of UK electricity was produced by renewables last week. This kept pressure on prices with the average cost of generation being slightly higher than the week before despite the softening gas prices. Our transfers in were down on the previous week but French nuclear is still the dominant element.
As far as retail prices are concerned they’ve stayed stable far later this year than in previous years, supported by a strong gas stock position and continued stagnation of the Chinese economy which suppresses global demand. We expect a bumpy ride at some stage between now and April but for now enjoy the ride
|Gas: Gas prices fell yesterday. Prices in the prompt declined as Wind generation was forecast to reach 12.8GWS over the weekend, causing predicted Gas demand to fall to 139mcm/day. High levels of storage across Europe and low demand for LNG across Asia, further supported the price declines.
Power: Power prices were also in decline yesterday tracking Gas and Oil markets. Temperatures are to average 1-3degrees higher than seasonal norm, limiting heating demand.
Crude: Oil prices fell $4 at market close yesterday, falling below the $80/barrel wall, the lowest price since July 2023. Investors believe the market is now over supplied as they look to the Global economy rather than just the OPEC and US bullish views on Chinese and American demand.
Carbon (EU ETS): The ICE Dec-23 fell to €77.01/t yesterday. The contract is currently trading at €77.07/t at the time of writing.
Carbon (UKAs): The ICE Dec-23 fell to £41.51/t yesterday. The contract has not yet traded at the time of writing.