Your Weekly Guide to UK Energy Markets
Welcome to The Smart Energy Company's Weekly Wholesale Energy Market Report, your go-to source for the latest insights and updates on UK energy markets. As an energy brokerage company, we understand the importance of staying informed about the changing trends in the energy market. That's why we provide these weekly market reports, to help businesses like yours make informed decisions when negotiating your next energy contract.
Weekly Wholesale Energy Market Report: Gas & Power Markets
From the 11th to the 18th of September 2023, the gas and power markets experienced notable fluctuations, influenced by a myriad of factors ranging from domestic demand to international supply disruptions.
Start of the Week:
The week commenced on the 11th with the NBP DA contract trading at 93.25p/th and electricity at £97.25/MWh. These opening prices were influenced by extended outages in Norway and ongoing strikes in Australia.
Midweek Movements:
By the 12th, gas prices rose to 92.5p/th and electricity to £89.25/MWh, driven by a drop in flows from Freeport and a decrease in Norwegian nominations. On the 13th, gas prices retreated to 88p/th while electricity remained stable at £90.00/MWh, influenced by a tribunal date set for Australian strikes and a drop in gas-for-power demand.
The 14th saw a slight increase in gas prices to 94p/th, but electricity prices dropped to £90.00/MWh. This was due to forecasted drops in wind speeds in the UK and ongoing outages in Norway.
Week's End:
The week concluded on the 15th with gas at 92.90p/th and electricity at £79.50/MWh. The key drivers were shortened maintenance work at the Kollsnes gas processing plant and ongoing developments around strike action at Australian Chevron LNG plants.
Start of the New Week:
The new week began on the 18th with gas at 88.00p/th and electricity at £63.00/MWh. The main influences were another delay in the start-up of the giant Troll field and a significant softening in demand due to strong winds over the NWE.
Key Points:
Australian Strikes: The ongoing strikes at Chevron's Australian LNG facilities continued to add volatility to the market.
Norwegian Outages: Delays and extensions in Norwegian outages had a significant impact on gas prices.
Demand Fluctuations: Both local and non-local demand experienced changes, affecting the market balance significantly.
Graph of the Last Week's Movements:
Let's take a visual look at the past week's gas and power market movements
Forecast:
In the upcoming week, the gas and power markets are set for a mixed outlook. Norwegian gas flows are expected to stabilise with the start-up of the Troll field, potentially easing gas prices. However, the Australian tribunal decision on 22nd September could add volatility. On the electricity front, strong winds and high French nuclear production could stabilise prices, but cooler UK weather may increase both gas and electricity demand. Overall, it's a week that calls for cautious optimism and close monitoring of key developments.
Table of the Movements on Each Day in the Last Week:
Here's a detailed breakdown of the daily changes in gas and electric prices over the past week:
DAY AHEAD PRICES | Gas (pence per therm) | Electric (£ per MWh) |
11/09/2023 | 93.25 | 97.25 |
12/09/2023 | 88.25 | 89.25 |
13/09/2023 | 92.10 | 90.00 |
14/09/2023 | 90.30 | 90.00 |
15/09/2023 | 92.90 | 79.50 |
18/09/2023 | 88.00 | 63.00 |
WEEKLY AVERAGE | 90.80 | 84.83 |
Weekly Wholesale Energy Market Report: Oil Markets
From the 11th to the 18th of September 2023, the oil markets saw considerable shifts, influenced by a range of factors including geopolitical tensions, supply cuts, and economic indicators.
Start of the Week: The week kicked off on the 11th with Brent crude futures at $90.65 a barrel and WTI crude at $87.51 a barrel. The opening prices were largely driven by extended supply cuts from Saudi Arabia and Russia, as well as rising U.S. diesel futures.
Midweek Movements: By the 12th, Brent crude slightly dipped to $90.64 a barrel, while WTI fell to $87.29 a barrel, influenced by concerns over Chinese economic activity. On the 13th, both Brent and WTI surged to $92.06 and $88.84 a barrel, respectively, buoyed by OPEC's optimistic outlook on global oil demand. The 14th saw a minor decline in prices, with Brent at $91.88 and WTI at $88.52 a barrel, impacted by a surprise build in U.S. crude inventories.
Week's End: The week wrapped up on the 15th with Brent at $93.70 a barrel and WTI at $90.16 a barrel. The key drivers were expectations of tighter supply and the IEA's report indicating a market deficit through the fourth quarter if production cuts are maintained.
Start of the New Week: The new week began on the 18th with Brent at $93.93 a barrel and WTI at $90.77 a barrel. The main influences were ongoing supply concerns, spearheaded by Saudi Arabian production cuts, and optimism around Chinese demand.
Key Points:
Supply Cuts: Extended supply cuts from Saudi Arabia and Russia continued to tighten the market.
Economic Indicators: Data from China and the U.S. had varying impacts on oil prices.
Inventory Levels: U.S. crude inventories showed unexpected changes, affecting market sentiment.
Forecast:
Oil markets are poised for continued volatility. Supply constraints, particularly from Saudi Arabia and Russia's extended production cuts, are expected to keep prices elevated. On the other hand, geopolitical factors, such as ongoing strikes in Australia and potential disruptions in the Middle East, could add further uncertainty. Demand-side indicators will also be crucial; any positive economic data from major economies like the U.S. and China could provide a boost to oil prices. Conversely, negative economic news could exert downward pressure. In summary, the week ahead is likely to see a complex interplay of supply and demand factors, geopolitical developments, and economic indicators, making it a period of cautious watchfulness for market participants.
12-Month Graph to Show the Movements Over the Last Year
Now, let's zoom out and take a look at the long-term trends in the energy market over the past year:
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