Good Morning! Here’s Your Energy Market Report for 11/09/2024
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Day Ahead Wholesale Energy Market Prices for 11/09/2024
11/09/2024 | Today (Open) | Yesterday (Close) | Last Week (Close) | Last Month (Close) | Last Year (Close) |
Gas (pence per therm) | 86.25 | 84.20 | 86.45 | 83.75 | 93.25 |
Electric (£ per MWh) | 79.00 | 55.50 | 79.35 | 54.75 | 97.25 |
The Day Ahead prices offer a snapshot of immediate energy costs, reflecting the latest market conditions. These figures serve as a real-time indicator of short-term trends that could influence your energy expenses. By monitoring these prices, you can better anticipate potential fluctuations and plan accordingly.
In-Depth Analysis of Today's Gas and Power Energy Market Report - 11/09/2024
Today’s Market Movement:
The NBP Day Ahead (DA) gas contract traded lower on Tuesday, falling by 3.75p/th to close at 85.25p/th, following losses in the Dutch TTF DA market. The market saw a downward correction after recent price gains, with today’s spot market likely to remain rangebound due to stable weather conditions.
Factors Influencing Prices:
Weather and Demand:
Stable Weather Forecast: The cold snap, which had previously boosted demand, has already been priced in. Looking ahead, forecasts indicate warmer-than-average temperatures in the coming weeks, which may lead to reduced demand for gas and keep prices under pressure.
Norwegian Maintenance:
No Changes in Maintenance Schedule: The Norwegian maintenance schedule remains unchanged, suggesting little impact on gas supplies until the next phase of work begins on 19 September. This stable supply outlook is contributing to the sideways trading pattern in the market.
LNG Supply Concerns:
Gulf of Mexico Storm: A storm in the Gulf of Mexico poses a potential risk to LNG deliveries, which could impact the UK market in the coming weeks if shipments are delayed. However, no immediate disruptions have been reported.
Market Sentiment:
Front-Month Contracts Drop: The NBP front-month contract saw a sharp decline of 6%, settling at 84.58p/th. This indicates broader bearish sentiment in the market, with most forward contracts also experiencing declines.
Summary:
The NBP DA gas price fell to 85.25p/th yesterday, following a broader downward correction in the market. Stable weather conditions and a steady Norwegian maintenance schedule suggest little immediate change in supply and demand dynamics, while warmer weather in the coming weeks may reduce gas demand. A potential storm in the Gulf of Mexico could impact LNG deliveries, but for now, the market remains rangebound, with bearish sentiment dominating forward contracts.
Looking Forward with Month Ahead Power for October 2024
September 2024 | ||
Month Ahead Power | Today (open) | Yesterday (close) |
Gas (pence per therm) | 87.13 | 89.00 |
Electric (£ per MWh) | 78.33 | 77.15 |
Understanding Market Prices: Day Ahead vs. Month Ahead
Day Ahead and Month Ahead prices both offer insights into the energy market, but they can often differ. Day Ahead prices reflect the cost of energy for the following day, reacting to immediate factors like weather or short-term supply changes. Month Ahead prices, on the other hand, are based on expectations for the coming month, considering broader trends like seasonal demand and anticipated market shifts.
While Day Ahead prices might fluctuate, most energy rates are more closely tied to Month Ahead prices, which provide a more stable outlook. If you consistently see that Day Ahead prices are lower and Month Ahead prices are also trending downward, you can expect that energy costs may start to decrease. Conversely, if both Day Ahead and Month Ahead prices are rising, it’s likely that higher energy costs could follow. Keeping an eye on both helps you anticipate potential changes in your energy rates.
Oil Market Update: A Look at Today's Oil Prices - 11/09/2024
Today’s Market Movement:
Brent crude dropped by 3.7% in the last session, settling at $69.19 per barrel, marking a 3-year low. This sharp decline has led OPEC to revise its global oil demand forecast for 2024 and 2025, lowering its expectations for the commodity. This is the first time OPEC has adjusted its forecast since 2023.
Factors Influencing Prices:
OPEC Demand Revision:
Lowered Demand Expectations: OPEC’s revision of its oil demand forecast reflects concerns over weaker global consumption in the coming years. This bearish outlook weighed heavily on oil prices, pushing Brent crude to its lowest level in three years.
U.S. Supply Outlook:
EIA’s Contrasting View: The U.S. Energy Information Administration (EIA) offered a more positive outlook, stating that global oil demand is expected to grow this year. However, the EIA also highlighted that oil output may struggle to keep pace, creating a potential supply-demand imbalance.
Storm Impact:
Tropical Storm Francine: The ongoing storm in the Gulf of Mexico has forced the shutdown of many oil rigs as a safety precaution, further complicating the supply situation. While this could limit output in the short term, it has yet to fully offset the downward pressure from demand concerns.
Stock Market Reaction:
Energy Sector Losses: Energy stocks were the biggest losers in the S&P 500, with companies like Chevron hitting 52-week lows, reflecting the broader market's reaction to falling oil prices and the negative demand outlook.
Summary:
Brent crude fell to a 3-year low of $69.19 per barrel after OPEC revised its global oil demand forecast for 2024 and 2025. This revision, combined with the impact of Tropical Storm Francine in the Gulf of Mexico and weaker energy stocks, drove a bearish sentiment in the market. The U.S. EIA’s more optimistic outlook on demand growth provided some contrast, but concerns about oversupply and sluggish demand continue to weigh on prices.
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Disclaimer: This blog provides insights into the market and should not be the only thing you use to make business decisions.
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