On Tuesday wholesale Gas and Electricity prices gave up all of the gains made on Monday, plus extra.
TPG’s belief remains that the market gets manipulated by traders who are looking to minimise losses on their positions while the fundamentals remain strong. Those fundamentals are that Asian demand remains weak, UK and European stocks are high, and temperatures are rising year on year. These factors, when combined with the fact that 30% more Gas will be available by the end of 2025, all indicate that prices will drop.
| Gas: Gas prices led the energy complex price declines yesterday. Near curve temperatures are expected to rise, leading to a decline in demand for gas. The closing linepack for yesterday ended 11.3MCM long. Power: Power prices fell yesterday, being influenced by the declines across the energy complex. Upwards revision of solar generation eased prices in the prompt. Oil: Oil prices fell to the lowest level in four months yesterday. Despite OPEC+ extending their 2.2 million barrel production cut, eight producers are in line to phase out their production cuts starting from October 2024, with traders expecting a future oversupply. Carbon (EU ETS): The ICE Dec-24 fell to €72.33/t. The contract is currently trading at €72.40 at the time of writing. Carbon (UKAs): The ICE Dec-24 fell to £47.24/t yesterday, due to profit taking. The contract has opened trading at £47.68/t this morning. |
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