Welcome to our Weekly Energy Market update, where we delve into the latest trends and changes from 23rd September to 30th September 2024. In this update, we provide an overview of key fluctuations in the UK gas and power markets, highlighting trends, insights, and forecasts for the coming week to help you make informed decisions for your business.
Snapshot of Weekly Energy Market Averages
Average Gas Price: 89.10 p/th (↑ 8.21%)
Average Electricity Price: £73.91/MWh (↓ 9.18%)
Gas and Power Market Overview
Gas Market
The gas market witnessed noticeable volatility over the past week, with prices fluctuating between 86.50 p/th and 94.00 p/th. The week started with price increases driven by colder weather forecasts and extended Norwegian maintenance. As the week progressed, prices fluctuated due to several factors, including increased demand and supply disruptions.
Start of the week: 87.00 p/th on Monday, 23rd September
End of the week: 94.00 p/th on Friday, 30th September
Power Market Overview
The power market saw fluctuations driven by varying wind speeds and changes in gas-for-power demand. Power prices dropped overall, moving between £54.50/MWh and £84.75/MWh throughout the week. Colder weather increased the demand for electricity, but stronger wind generation towards the latter part of the week alleviated some reliance on gas-fired power.
Start of the week: £83.50/MWh on Monday, 23rd September
End of the week: £72.50/MWh on Friday, 30th September
How Does This Compare to Last Week?
Period | Average Gas Price (p/th) | Average Electricity Price (£/MWh) |
Last Week (16/09/2024 - 23/09/2024) | 82.33 | 81.39 |
This Week (23/09/2024 - 30/09/2024) | 89.10 | 73.91 |
Percentage Change | +8.21% | -9.18% |
Gas Prices: The average gas price increased by 8.21%, rising from 82.33 p/th to 89.10 p/th. The increase was driven by colder weather forecasts and prolonged Norwegian maintenance, which tightened supply.
Electricity Prices: The average electricity price decreased by 9.18%, dropping from £81.39/MWh to £73.91/MWh. This drop was primarily due to increased wind generation, reducing the need for gas-fired power plants.
Factors Driving Gas and Power Prices This Week
Key Influences on Gas Prices
Extended Norwegian Maintenance: Continued maintenance at key Norwegian infrastructure points, including Langeled, tightened supply and kept prices elevated.
Colder Weather: A cold snap in late September led to increased heating demand, pushing prices higher as businesses and households ramped up their usage.
Supply Disruptions: Lower-than-expected imports via key pipelines like Nychamna and St. Fergus Mobil exacerbated the supply-demand imbalance.
Key Influences on Electricity Prices
Wind Speeds: Stronger wind generation at the start and end of the week reduced the need for gas-powered electricity, pushing prices lower.
Gas-for-Power Demand: Variations in wind speeds led to fluctuations in gas-for-power demand, influencing price movements throughout the week.
Colder Temperatures: As temperatures dropped, demand for heating surged, driving up electricity consumption in the early part of the week.
Market Forecast for the Upcoming Week
Looking ahead to the upcoming week, there are several factors that could influence gas and electricity prices:
Norwegian Gas Flows: The easing of Norwegian maintenance next week should stabilise gas supply. However, supply risk remains as any unplanned extensions could lead to price spikes.
Weather Conditions: Milder temperatures are forecast from midweek, which could ease gas and electricity demand slightly. However, colder conditions returning in early October could drive demand back up.
Wind Generation: Stronger wind speeds are expected later in the week, which may boost renewable power generation, easing reliance on gas-for-power.
What to Watch:
Renewable Energy Output: Stronger wind speeds could reduce reliance on gas-for-power, bringing electricity prices down.
Supply Chain Risks: Keep an eye on any unexpected maintenance extensions or geopolitical disruptions that could affect gas imports.
Colder Weather: If colder temperatures persist, gas demand could increase, placing upward pressure on prices.
Client Success Story
At The Smart Energy Company, we provide ongoing insights and tailored advice, helping businesses secure the best rates at the right time.
"I've worked with a lot of energy brokers and unfailingly they just want a quick transaction after a 5-minute call. The Smart Energy Company sent us weekly pricing and shared sector insights for several months before we signed paper. How could we use anyone else? Also, they found the best pricing. We did check."
-- Chris DuCousso, Director, Gym Owner
Weekly Oil Market Summary: 23rd September - 30th September 2024
While the focus of our updates is on gas and power, the oil market often influences energy prices due to its global benchmark status. Fluctuations in oil can impact gas and power prices, particularly during times of supply chain disruptions and geopolitical tensions.
Key Movements:
23/09/2024 – Oil prices fell by 0.52%, with Brent crude futures dropping to $74.49/barrel due to a U.S. interest rate cut and lower U.S. supply.
24/09/2024 – Oil prices dipped further by 0.8%, with concerns over weak economic growth in China and the Eurozone.
25/09/2024 – Prices climbed by 1.7% due to growing concerns about conflict in the Middle East and potential disruptions to oil supply.
26/09/2024 – Oil prices slumped by 2.27%, following easing concerns about Libyan supply disruptions.
30/09/2024 – Brent crude settled at $71.98/barrel, after a week of fluctuations driven by global supply concerns and weaker demand.
Conclusion & Advice for Businesses
This week saw gas prices rise due to colder weather and Norwegian supply disruptions, while electricity prices decreased as wind generation reduced the need for gas-fired power. As we move into next week, milder temperatures could ease demand slightly, but volatility remains likely, especially with the continued impact of Norwegian maintenance.
Key Takeaways for Businesses:
Gas Prices: The increase in gas prices suggests that now might be a good time to secure contracts before further increases.
Electricity Prices: With electricity prices fluctuating, businesses should consider fixing rates now to avoid future volatility as colder weather approaches.
For tailored advice and a free, no-obligation quote, get in touch with us today.
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