Daily Energy Market Report & Business Rates | Smart Energy Co

Good Morning! Here’s Your Energy Market Report for 21/02/2025

Today's Key Insight

📉 UK electricity prices have plummeted to £73.13/MWh, down 16.41% daily and 42.18% weekly, marking one of the sharpest declines in recent months.

📉 Gas prices also dropped slightly, with NBP Day Ahead falling 0.88% to 112.50p/therm, as strong LNG arrivals and milder weather continue to weigh on prices.



🛢 Oil prices rose for the third straight day, with Brent crude settling at $76.48/barrel, as supply disruptions in Russia and falling U.S. fuel inventories supported gains.

Day Ahead Price Table

Comparison Summary

Gas Market Update

Gas prices fell slightly today by 0.88% to 112.50p/therm, continuing to trend lower due to high LNG arrivals, strong Norwegian flows, and mild weather reducing demand.

Key Market Drivers

📉 UK Gas Demand Remains Weak

• Gas-for-power demand is expected to rise slightly to 23 mcm/day, up 6 mcm from yesterday.
• Milder weather and strong wind power generation continue to keep overall demand low.

🚢 LNG & Norwegian Flows Support Stability

• The UK is expecting several additional LNG cargoes in the next 7 days, strengthening supply.
• Norwegian flows remain robust, further stabilising the market.

⚖ Market Finding a Trading Range

• The NBP front-month contract is currently trading at 114.60p/therm, holding within a range of 113.00p - 120.00p/therm.
• The TTF front month contract remains between 47.00 €/MWh and 50.00 €/MWh.

What’s Next?

• ✅ Gas prices may remain rangebound in the near term, with strong supply counteracting any demand increases.
• 
  ⚠ Colder weather forecasts for mid-March could provide some upside risk if temperatures drop below expectations.

Electricity Market Update

⚡ UK electricity prices plunged 16.41% today, falling to £73.13/MWh, driven by strong renewable output and weak demand.

Key Market Drivers

💨 Wind Generation Has Doubled This Week

• Wind speeds are over 4m/s above seasonal normal, significantly reducing reliance on gas-fired generation.
• Gas-for-power demand remains low, sitting at 23 mcm/day, as wind replaces fossil fuel generation.

📉 Falling Demand & Market Pressures

• Milder weather across Europe continues to lower overall electricity consumption.
• Strong injections into UK storage indicate excess supply conditions.

🌍 Carbon & Emissions Market Impact

• The Dec-25 EUA carbon contract is pricing at €74.40/tonne, slightly up from yesterday but down €3.00/tonne from Monday, adding downward pressure to electricity prices.

What’s Next?

• ✅ With wind generation expected to remain high next week, electricity prices could stay suppressed.
  ⚠ However, lower wind output next month or geopolitical risks could slow the downward trend.

Month Ahead Prices: What Can We Expect for March 2025?

Month Ahead Review:

✅ Gas: Prices edged down slightly, but remain within a stable trading range.

✅Electricity: Prices dropped below £92/MWh, reflecting strong renewable generation and lower

Understanding Day Ahead vs. Month Ahead Prices:

• Day Ahead Prices: Reflect next-day delivery costs, influenced by immediate factors like weather and renewable output.

• Month Ahead Prices: Represent delivery costs for the following month, typically steadier and shaped by seasonal trends.
  

Market Trends Over the Last 6 Months

Gas Trends (grey line):

Prices peaked in early January, but have since stabilised within a 113p-120p/therm range.



The recent drop aligns with lower seasonal demand and improved supply conditions.

Power Trends (blue line):

Electricity prices saw sharp spikes in December and January, but have fallen significantly since mid-February.

Today's sharp decline to £73.13/MWh marks a key shift toward lower prices.

Oil Market Insights

🛢 Oil prices rose for the third straight day, closing at $76.48/barrel (Brent) and $72.57/barrel (WTI).

Key Market Drivers:

📉 Supply Disruptions in Russia & U.S. Fuel Markets

• Ukraine drone strikes targeted Russian pipelines, reducing crude exports.
• U.S. gasoline and distillate inventories dropped sharply, supporting prices.

⚖ Ukraine Peace Talks Continue

• Russia and the U.S. held their first formal discussions since the war began, aiming for de-escalation.
• If progress is made, sanctions could ease, adding more supply to global markets.

📊 U.S. Refinery Maintenance & Crude Stockpiles

• U.S. crude inventories increased slightly, but refinery maintenance led to a drop in fuel production, keeping prices supported.

What’s Next?

✅ If peace talks progress, oil prices could soften due to expectations of higher supply.
⚠ However, further disruptions to Russian oil exports could keep prices elevated.

What Should Businesses Do?

✅ Gas Contracts:

• Prices remain stable but volatile. Businesses should monitor market trends before locking in contracts.

✅ Electricity Contracts:

• Electricity prices have dropped significantly—this could be a good opportunity to secure lower rates.

📢 Stay ahead of market changes to protect your energy costs!

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