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Weekly Wholesale Energy Market Update - UK Energy & Oil Markets - 29/08/2023

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


The week from the 22nd to the 29th of August 2023 saw considerable volatility in both the gas and power markets. Influences ranged from industrial actions in Australia to weather conditions affecting supply and demand.

Gas Market: 22nd August 2023: The week began with the National Balancing Point Day-Ahead (NBP DA) contract closing at a high of 107p/th, influenced by slower wind speeds and the end of a heatwave, which increased gas for power and local demand.

23rd August 2023: The NBP DA contract experienced a decrease, closing at 92.70p/th. Lower wind speeds and extended outages at Troll were significant factors.

24th August 2023: The NBP DA contract dropped to 80.90p/th, influenced by a deal between Woodside Energy and the Australian Workers Union, which eased market uncertainty.

25th August 2023: The NBP DA contract increased slightly to 86.55p/th. The potential for industrial action at Chevron's facilities was a key influencer.

29th August 2023: The week concluded with the NBP DA contract at 93.98p/th. Workers at Chevron’s LNG facilities in Australia voting in favor of industrial action drove this bullish sentiment. Power Market:

Electricity prices also experienced fluctuations, starting at £106.75/MWh on the 22nd, peaking at £112.00/MWh on the 23rd, declining to £95.00/MWh on the 25th, and closing at £92.75/MWh on the 29th.

Key Points:

  1. Industrial Actions: Labor disputes and potential strikes in Australia significantly impacted both gas and power prices.

  2. Weather Conditions: Changes in wind speeds and the end of a heatwave influenced gas for power demand.

  3. Facility Outages: Various facilities and reactors undergoing maintenance or outages played a role in price movements.

Graph of the Last Week's Movements:


Let's take a visual look at the past week's gas and power market movements


graph showing wholesale weekly energy market movements

snapshot of wholesale energy market movements

Forecast:

As we enter the upcoming week, the market is expected to remain volatile, influenced by ongoing labor disputes in Australia and their potential impact on global LNG supplies.

 

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)

21/08/2023

101.60

95.25

22/08/2023

107.00

106.75

23/08/2023

92.70

112.00

24/08/2023

80.90

93.50

25/08/2023

86.55

95.00

29/08/2023

93.98

92.75

WEEKLY AVERAGE

93.79

99.21

 

Weekly Wholesale Energy Market Report: Oil Markets


The oil market experienced a week of volatility, with prices fluctuating due to a variety of factors ranging from global demand concerns to geopolitical events and economic data.


Brent Crude and WTI Performance

  • 22/08/2023: Brent crude closed at $84.46, down 0.4%, while WTI settled at $80.72, down 0.65%. The market was influenced by fading hopes for Chinese demand and concerns over U.S. interest rates.

  • 23/08/2023: Brent crude settled at $84.03, down 0.5%, and WTI at $79.64. The sluggish economic activity in China and the possibility of further U.S. interest rate hikes weighed on the market.

  • 24/08/2023: Brent crude was down 1% at $83.21, and WTI was down 0.9% at $78.89. A build in U.S. gasoline stocks and weak global manufacturing data contributed to the decline.

  • 25/08/2023: Brent crude closed at $83.36, and WTI at $79.05. Prices rebounded slightly after a report of declining gasoil stocks in Europe.

  • 29/08/2023: Brent futures rose 1.3% to $84.48, and WTI rose 1% to $79.83. A fire at a Louisiana refinery and a drop in the number of oil rigs contributed to the rise.

Key Points

  • Demand Concerns: Sluggish economic growth in China and the U.S. raised concerns about future oil demand.

  • Supply Factors: OPEC and Russia's production cuts aimed at balancing supply with demand had a notable impact.

  • Economic Indicators: U.S. interest rates and economic data from Germany and the Eurozone influenced market sentiment.

  • Unexpected Events: A fire at a Louisiana refinery added to the market volatility.

Forecast

The market is expected to remain volatile in the coming week, with a focus on economic indicators and geopolitical events. Investors will be closely watching the U.S. Federal Reserve's next moves and any developments in China's economic recovery.


 

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:


graph showing wholesale market movements over the last 12 months

 

Stay Updated with Our Weekly Market Reports


Check our weekly market reports regularly to stay updated on the latest UK energy market trends. This equips you with the knowledge to capitalise on savings opportunities and make smart contract renewal decisions for your business.


 

Ready to Renew?


Contact us today to discuss the contract options for your next energy renewal. Our experts can provide tailored quotes to help enhance your energy strategy.


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