Overview of September’s Energy Market
September 2024 was a month of volatility across the UK energy market. Colder-than-expected weather, extended maintenance in Norway, and geopolitical tensions in the Middle East all played significant roles in driving prices higher. This report provides a detailed analysis of how these factors influenced the UK energy market in September 2024 and what businesses should expect as we move into October.
Key Highlights for the UK Energy Market September 2024
Gas Market: The average gas price in September was 93.33p/th, up from 85.55p/th in August. This increase was driven by supply constraints and colder weather.
Power Market: The average electricity price for September was £87.30/MWh, up from £63.88/MWh in August, as lower wind generation and higher gas-for-power demand pushed prices upwards.
Oil Market: Brent crude averaged $73.75 per barrel, with prices fluctuating due to concerns about supply disruptions, global demand, and the impact of geopolitical tensions.
Gas Market Overview: UK Energy Market September 2024
The gas market in September was marked by continued upward price pressure, with prices fluctuating between 78.75p/th and 93.00p/th. The rise in prices was largely driven by ongoing maintenance in Norway, colder-than-usual weather, and geopolitical tensions.
Key Drivers in September:
Norwegian Maintenance: Ongoing maintenance on key gas pipelines in Norway, including Langeled, restricted gas supply to the UK, keeping prices elevated throughout the month.
Colder Weather: A cold snap in late September led to increased demand for gas, as both residential and business heating needs rose.
Geopolitical Risks: Tensions in the Middle East, particularly between Israel and Lebanon, created uncertainty in the energy market, adding to the price volatility.
Gas Prices:
Start of the Month: 93.33p/th (02 September 2024)
End of the Month: 93.00p/th (30 September 2024)
Highest Price: 94.00p/th (30 September 2024)
Lowest Price: 78.75p/th (19 September 2024)
Month-to-Month Comparison:
May 2024: 74.00p/th – Prices rose steadily from May, driven by supply issues.
June 2024: 82.50p/th – Unplanned outages and geopolitical tensions pushed prices higher.
July 2024: 75.53p/th – A brief dip as supply improved temporarily.
August 2024: 85.55p/th – Prices surged due to ongoing maintenance and supply concerns
Power Market Overview: UK Energy Market September 2024
Electricity prices also rose significantly in September, driven by reduced wind generation and increased reliance on gas-fired power stations. Prices fluctuated between £54.50/MWh and £93.75/MWh, with cooler weather contributing to higher demand.
Key Drivers in September:
Wind Generation: Lower-than-expected wind speeds throughout the month increased the need for gas-powered electricity, which pushed prices higher.
Gas-for-Power Demand: As gas prices increased, so did the cost of gas-fired electricity generation, contributing to the rise in power prices.
Temperature Drops: Colder-than-average temperatures in late September increased electricity demand for heating, further driving prices upwards.
Electricity Prices:
Start of the Month: £93.75/MWh (02 September 2024)
End of the Month: £81.50/MWh (30 September 2024)
Highest Price: £93.75/MWh (02 September 2024)
Lowest Price: £54.50/MWh (26 September 2024)
Month-to-Month Comparison:
May 2024: £73.50/MWh – Prices fluctuated due to wind generation and gas-for-power demand.
June 2024: £75.28/MWh – Increased gas-fired power generation pushed prices higher.
July 2024: £73.61/MWh – Prices remained volatile due to varying wind speeds and maintenance issues.
August 2024: £63.88/MWh – Prices dipped due to increased renewable output.
Last 12 month market movements
As we examine the broader trends, this graph provides a retrospective look at the last 12 months in the monthly energy market. It charts the day-ahead wholesale prices for gas and electricity, illustrating the volatility and trends that have shaped the market over the year.
Oil Market Overview: UK Energy Market September 2024
The oil market in September experienced a mixture of price fluctuations, with Brent crude averaging $73.75 per barrel. The market was influenced by geopolitical tensions, potential increases in OPEC+ production, and concerns over global demand.
Key Drivers in September:
Ongoing Middle East Tensions: Rising tensions in the Middle East, particularly involving Israel, Lebanon, and Iran, led to concerns about potential supply disruptions, adding upward pressure to oil prices.
Global Demand Concerns: Slower economic growth in major markets like China and the Eurozone weighed heavily on oil prices throughout the month.
OPEC+ Production: The expectation of increased OPEC+ production starting in October contributed to price drops, as traders anticipated more supply entering the market.
Oil Prices:
Highest Price: $75.17 per barrel (25 September 2024)
Lowest Price: $69.15 per barrel (06 September 2024)
Significant Events:
06 September 2024: Oil prices hit a 14-month low as global demand concerns and expectations of increased supply from Libya weighed on the market.
25 September 2024: Oil prices rebounded as monetary stimulus from China and concerns over growing conflict in the Middle East boosted prices.
Looking Ahead: October 2024 Forecast for the UK Energy Market
As we move into October, several factors are likely to continue influencing gas, power, and oil markets:
Norwegian Gas Supply: The easing of Norwegian maintenance is expected to stabilise gas supply, but any unplanned disruptions could lead to further price spikes.
Weather Conditions: Milder temperatures are forecast from mid-October, which could ease gas and electricity demand slightly. However, colder conditions later in the month could drive demand back up.
Renewable Energy Output: Stronger wind speeds are expected later in the month, which may reduce reliance on gas-for-power and bring electricity prices down.
OPEC+ Production: An anticipated rise in OPEC+ production could help stabilise oil prices, though continued geopolitical risks may limit price decreases.
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Conclusion: UK Energy Market September 2024
September 2024 was a month of significant price increases across the gas, power, and oil markets, driven by colder weather, supply disruptions, and geopolitical uncertainty. As we move into October, businesses should stay informed about market developments and consider reviewing their energy contracts to secure favourable rates before further price rises.
At The Smart Energy Company, we provide expert guidance and tailored market insights to help businesses navigate the energy market. To ensure you secure the best rates, consider getting a free quote today.
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