Tom McGlynn
- Jun 1, 2022
- 2 min read

June 2022 - Monthly Wholesale Market Update

Today, the Gas market has Increased by 13.35% than this time last month with the electric market down by 13.04%.

Orsted and Shell Energy Europe's gas supply agreements with Gazprom were pulled up after the two businesses refused to comply with Russia's new payment structure. Gazprom supplied Orsted with around 1.9 billion cubic metres of gas last year, while Shell received 1.2 billion cubic metres. Denmark, the sixth European country after Poland, Finland, Bulgaria, and the Netherlands, will effectively be cut off from Russian supplies as a result of the decision. Italy, France, and Germany have all met with Gazprom's demands, so their supplies have not been cut off directly, while the drive to cut out Shell has had an impact in Germany.

Energy rates rose across the board as a result of the shift, with NBP Month Ahead up 2.57p/th [1.6 percent] and Baseload up £3.25/MWh [1.9 percent]. Annualised energy costs also rose, with NBP up 5.01p/th and power up £4.63/MWh [2.3 percent]. Gains and losses in May are totally offset by gains in June, sending the market back to late-April highs.

TTF in the Netherlands is up 1% this morning, with Brent up $1.81/bbl (1.51%) and Carbon up about a euro (1.15%). As the cost-of-living crisis worsens, European leaders have asked the European Commission to look into whether price caps on gas imports could help to stabilise prices. Another proposal is for the bloc to pool its energy purchases in order to get a better price on the global market by purchasing in bulk.

With Sep-22 NBP offered at a 6p/th premium and stopped activity signalling uncertainty, bullish momentum is expected to ripple across the UK's energy markets today. Low wind output isn't helping the UK's problems, with renewables accounting for only 16 percent of the power stack this morning, causing the NTS to be more than 7mcm short.