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Weekly Wholesale Energy Market Update - UK Energy & Oil Markets - 10/06/2024

Updated: 2 days ago

Welcome to our 'Weekly Energy Market' update, where we dissect the latest trends and changes from 3rd June to 10th June 2024. Your guide through the fluctuations of the last week: revealing trends, insights, and forecasts in the UK energy and oil markets.

image to show how much the energy market has moved in the last week

Weekly Energy Market At A Glance


Gas Market Overview


The gas market experienced notable fluctuations throughout the week. Here's a summary of the key movements and factors influencing the market:


  • 03/06/2024: The NBP traded on par at 83.5p/th from the previous close on Friday. Lower local demand was offset by an increase in gas-for-power. Supply-side uncertainty remains a bullish factor with muted Langeled flows and limited LNG sendout.

  • 04/06/2024: The NBP traded bullishly at 88p/th, driven by an unplanned outage at Nyhamna, keeping Langeled flows muted. Increased local demand added to the tightening balance.

  • 05/06/2024: The NBP dropped to 81.75p/th as news of Nyhamna's return on Friday eased supply concerns. Gas-for-power demand increased due to lower wind speeds.

  • 06/06/2024: The NBP traded lower at 80.6p/th despite increased demand, as higher flows via Vesterled compensated for lower LNG sendout.

  • 07/06/2024: The NBP fell to 79.2p/th with the anticipated return of Nyhamna, leading to a looser balance and increased Norwegian flows.

  • 10/06/2024: The NBP closed at 79.2p/th, with Langeled flows recovering over the weekend, easing supply fears. Demand was up due to high wind speeds.


Power Market Overview

Electricity prices mirrored the trends in the gas market, influenced by changes in gas prices, renewable energy output, and local demand:


  • 03/06/2024: £72.50/MWh

  • 04/06/2024: £66.00/MWh

  • 05/06/2024: £80.00/MWh

  • 06/06/2024: £68.50/MWh

  • 07/06/2024: £77.60/MWh

  • 10/06/2024: £74.00/MWh


Weekly Summary and Insights


The 7-day average prices were:

  • Gas: 82.09p/th

  • Electricity: £73.10/MWh


 

Key Influences:


  1. Supply-Side Uncertainty: Unplanned outage at Nyhamna and muted Langeled flows caused initial price spikes.

  2. Local Demand: Fluctuations in local and gas-for-power demand impacted prices.

  3. Maintenance Schedules: UKCS maintenance and tight balance contributed to volatility.

  4. Norwegian Flows: Recovery in Langeled flows and increased Norwegian supply helped stabilise prices. Power Market

 

How Does This Compare to Last Week?


This week's gas and power markets followed similar volatility patterns to the previous week but showed distinct influences and outcomes. Gas prices saw a significant increase mid-week, driven by unplanned outages and supply uncertainties, before stabilising towards the end of the week. Electricity prices were more stable overall but showed dips and peaks in response to gas price movements and renewable energy output.


 

Market Forecast for the Upcoming Week


The upcoming week in the gas and power markets is expected to be influenced by several key factors:


  1. Supply Stability: With the recovery of Langeled flows and steady Norwegian supply, the supply side is expected to stabilize, reducing previous uncertainties.

  2. Renewable Energy Output: Anticipated higher wind speeds could lower gas-for-power demand, potentially leading to softer gas prices.

  3. Maintenance and LNG Arrivals: Ongoing UKCS maintenance and the monitoring of LNG sendout will be critical. Any disruptions could impact market balance and prices.

  4. Geopolitical Events: Continued geopolitical developments will be a significant factor to watch, potentially influencing market sentiment and price volatility.


Overall, we expect a more stable market with potential for slight decreases in gas prices due to improved supply conditions and higher renewable energy output. However, maintenance schedules and geopolitical events will remain key variables to monitor.

This image shows the market movements over the last 12 months, providing a broader context for the recent price changes. It highlights the seasonal volatility and the impact of external factors such as maintenance schedules and geopolitical events.

 

Weekly Oil Market Update: 28th May - 3rd June 2024

Overview

This past week, oil markets experienced significant fluctuations influenced by OPEC+ decisions, economic indicators, and inventory levels. Here's a detailed look at the developments:


Oil Market at a Glance


  • 03/06/2024: Oil prices fell as investors awaited the OPEC+ meeting. Brent futures for July delivery were down 24 cents to $81.62/barrel, and WTI crude fell 92 cents to $76.99.

  • 04/06/2024: Oil prices tumbled by $3 a barrel to their lowest in nearly 4 months. Brent settled at $78.36/barrel, and WTI at $74.22/barrel. OPEC+ agreed to extend most oil output cuts into 2025 but left room for voluntary cuts to be unwound from October onward.

  • 05/06/2024: Oil prices continued to fall on skepticism about OPEC+'s decision to boost supply. Brent settled at $77.52/barrel, and WTI at $73.25.

  • 06/06/2024: Brent crude prices rose by 1.1% to $78.41/barrel after the U.S. Federal Reserve hinted at an interest rate cut. Gains were capped by high U.S. inventories and OPEC+ plans to increase supply.

  • 07/06/2024: Brent crude futures settled $1.46 higher at $79.87/barrel after the European Central Bank cut interest rates, spurring hopes that the Fed will follow suit.

  • 10/06/2024: Brent crude futures settled 25 cents lower at $79.62/barrel. Oil prices posted a third straight weekly loss as investors weighed OPEC+ reassurances against the latest U.S. jobs data.


Key Influences


  1. OPEC+ Decisions: The market responded to OPEC+'s agreement to extend output cuts into 2025 and potential unwinding of voluntary cuts.

  2. Economic Indicators: U.S. jobs data and European Central Bank interest rate cuts influenced market sentiment and price movements.

  3. Supply and Demand Dynamics: High U.S. inventories and concerns over global demand growth played crucial roles.


Market Forecast for the Upcoming Week


Looking ahead, several factors will influence the oil market:


  1. OPEC+ Impact: Continued monitoring of OPEC+ adherence to output cuts and any changes in voluntary cuts will be crucial.

  2. Economic Data: U.S. and global economic indicators, particularly related to interest rates and employment, will significantly impact market sentiment.

  3. Inventory Levels: Changes in U.S. and global oil inventories will continue to play a key role in price movements.


We expect oil prices to remain sensitive to OPEC+ decisions and economic data, with potential for volatility as markets digest the implications of recent supply and demand shifts.


 

Advice for Your Business

For advice that fits with the latest market situation, get in touch for a free business energy quote. Our team at the Smart Energy Company is ready to help you make informed choices, tailored to the market’s current state.

 

Get Your Free Business Energy Quote Today


Keep visiting our blog for weekly updates. If you have any questions or need more detailed advice, we’re just a call away. We’ll help you navigate through the market changes with ease and confidence.





Or Call us on 0151 459 3388


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