19th April 2024 Energy Price Alert – UK Gas & UK Electricity

On Thursday wholesale Gas and Electricity prices rose in response to colder weather, but this was before the latest escalation in the Middle East.

Over the last two weeks a clear gap has developed between the Electricity £/MWh price and the Gas p/thm price. The Gas price has advanced ahead of Electricity.

On the generation front Electricity at £31.94/MWh is over 80% generated by renewables and other sources, of which nuclear is the main one at 18%. Fossil fuels were at 12.8% last week and that is the reason for the disparity in the percentage prices increases of wholesale Gas and Electricity referred to above.

While renewables and other sources remain at such high levels the impact of increased wholesale Gas prices is limited in the Electricity market.

At a retail level we have seen Gas prices jump by around 10% in the last two weeks but continue to believe that this a short term issue, and that the long term market fundamentals will drive prices back down once the Middle East geo-political situation stabilises.

Gas: Prices gained throughout the curve yesterday, supported by cooler weather, lower winds and low levels of LNG cargo reaching Britain. The ongoing conflict in the Middle East also helped to keep market sentiment bullish.
Power: Power prices rose yesterday, tracking movement in NBP contracts. Next week’s wind output is set to be 10-20% below average. For today’s price outlook, as of last night’s close, please see the table at the bottom of this email.)
Oil: Prices fell yesterday despite a poor demand outlook. Due to tensions in the Middle East, a lot of the risk premium attached to contracts dropped off during yesterday’s trade. US inventory data showed that stockpiles continued to grow, placing further pressure on the commodity.
Carbon (EU ETS): The ICE Dec-24 rose to €71.53/t yesterday. This morning, the contract is currently trading at €71.05/t after opening higher than last night’s close at €72.56/t.
Carbon (UKAs): The ICE Dec-24 fell to £35.25/t yesterday. The contract opened higher this morning at £36.25/t, it has since fallen back to the same price as last nights close.  

#gas #electricity #businessutilities #businessgas #businesselectricity

The Procurement Group

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