8th January 2024 Energy Price Alert – UK Gas & UK Electricity

Gas and electricity prices continued to rise at the end of last week, due to the cold snap, along with issues in the Middle East and transport throught the Suez Canal.

We have seen these issues as short term and as we can see from the graphs, our logic so far, has been sound.

Short term contracts remain the order of the day for both gas and electricity.
Gas: Prices rose at the conclusion of last week across all contracts in the Gas market. Largely due to the impending cold snap combining with a drop of 19% in Wind generation. Temperatures are expected to reach 3°C lower than seasonal norms at 1.5°C, lifting front curve prices. The UK expects to receive 8 LNG cargoes over the next 3 weeks, keeping supply concerns to a minimum. 


Power:  Power prices continued to track the underlying Gas market. However, Wind output is forecast to reach 8.2GWs/day this week, 20% lower than seasonal average. 


Oil: Oil prices closed last Friday at a weekly gain as tensions in the Middle East continued. Rumours of an interest rate cut in the US and EU increased demand sentiment. However the re routing of cargoes away from the Suez Canal due to the conflict has so far increased freight costs by 36%. 


Carbon (EU ETS): The ICE Dec-24 rose to €76.35/t yesterday. Opening at €75.75 /t this morning, the contract is currently trading at €74.96/t. 

Carbon (UKAs): The ICE Dec-24 also rose to £44.45/t last Friday. The contract is currently trading at £43.55/t.

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The Procurement Group

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