Monthly Energy Market Overview: July 2024
July 2024 was a month of dynamic changes in the gas and power markets. With significant supply-side disruptions, varying demand due to weather conditions, and fluctuations in LNG cargo arrivals, the markets experienced both upward and downward trends. This report provides a comprehensive analysis of the key factors that influenced the markets, compares these trends with previous months, and offers a forecast for August 2024.
Key Highlights for June 2024
Gas Market: NBP prices fluctuated due to supply disruptions, weather impacts, and varying LNG sendouts.
Power Market: Power prices were influenced by wind generation, nuclear availability, and the carbon market.
LNG Cargo Arrivals: Limited LNG arrivals impacted market balance.
Market Trends and Influences
Gas Market Overview
July 2024 saw notable fluctuations in the gas market. Early in the month, NBP prices were influenced by steady Norwegian flows and robust gas-for-power demand due to lower wind speeds.
Mid-month, the market experienced easing as Hurricane Beryl's impact on U.S. LNG infrastructure turned out to be negligible. This, coupled with strong pipeline flows from Norway, kept the market well-supplied. However, prices rose again towards the end of the month due to concerns over further Norwegian maintenance outages and geopolitical tensions.
Average Gas Price for July 2024: The average NBP price for July was 75.53p/th.
Power Market Overview
Power prices in July 2024 were heavily influenced by wind generation and the availability of nuclear power. Lower wind speeds early in the month increased reliance on gas-fired power, driving up prices. As the month progressed, improved wind forecasts and the return of several nuclear reactors helped stabilize the market. Towards the end of the month, power prices rose again due to ongoing maintenance at key power plants and geopolitical tensions.
Average Electric Price for July 2024: The average NBP price for July was 73.61 £/MWh.
Summary
July 2024 was marked by significant fluctuations in the UK gas and electricity markets. Key factors included:
Supply disruptions and maintenance impacting gas availability.
Fluctuations in wind generation affecting gas-for-power demand.
Stable nuclear power output supporting electricity supply.
Limited LNG arrivals influencing market balance.
As we move into August, it's essential to stay informed and agile, given the dynamic nature of the energy market. We hope this update has provided a clear and concise overview of the monthly energy market trends.
Energy Market Averages
DATE | GAS (pence per therm) | ELECTRIC (£ per MWh) |
Last 7 Days | 79.04 | 75.86 |
Last Month | 75.53 | 73.61 |
Last Year | 82.48 | 76.75 |
How does this compare to June 2024?
Compared to June 2024, July saw continued volatility in both gas and power markets. In June, gas prices fluctuated significantly due to unplanned outages and maintenance activities. Starting the month at 83.00p per therm, prices peaked mid-month before stabilizing towards the end, averaging around 82.50p per therm. Electricity prices mirrored these trends, opening at £72.50/MWh and showing sharp movements throughout the month, influenced by wind generation and carbon market dynamics.
In July, gas prices saw further fluctuations influenced by steady Norwegian flows, minimal impact from Hurricane Beryl on U.S. LNG infrastructure, and concerns over Norwegian maintenance outages. Gas prices started at 78.50p per therm, with prices moving both up and down throughout the month, closing at an average of 76.75p per therm.
Electricity prices in July were impacted by similar factors, including fluctuations in wind generation and the return of several nuclear reactors. Starting at £77.20/MWh, prices varied through the month, resulting in an average of £73.28/MWh.
Price Changes Overview
Gas Prices: The average gas price in July decreased by approximately 6.97% compared to June (from 82.50p/th to 76.75p/th).
Electricity Prices: The average electricity price in July decreased by approximately 2.66% compared to June (from £75.28/MWh to £73.28/MWh).
Overall, gas prices in July were lower compared to June, reflecting a more stable supply situation despite ongoing maintenance activities. Power prices also trended slightly lower due to improved wind generation and stable nuclear output, though they remained influenced by geopolitical tensions and maintenance at key power plants.
Forecast for August 2024
Looking ahead, August is expected to see continued volatility, especially with planned maintenance in Norway and potential geopolitical tensions. However, with several LNG cargoes expected to arrive by mid-August, supply concerns may ease somewhat. Key factors to watch in August include:
Weather Conditions: Monitoring wind generation and temperatures will be crucial, as these factors affect both gas-for-power demand and overall energy consumption. August may see fluctuating wind speeds, impacting the reliance on gas-fired power.
Maintenance Schedules: Any planned or unplanned maintenance activities, particularly in the UKCS and Norway, could significantly impact supply. Notably, the maintenance schedule in Norway includes a record number of planned outages starting in September, which may influence market sentiment in August.
LNG Arrivals: The number and timing of LNG cargoes arriving in the UK will play a critical role in balancing supply. With expected LNG arrivals, there is potential for easing supply concerns, but any delays or changes in schedules could lead to market fluctuations.
Geopolitical Tensions: Ongoing geopolitical issues, especially in the Middle East and involving key energy suppliers, could impact market stability and prices.
Nuclear Power Output: The return of several nuclear reactors, expected by early August, will support electricity supply and could reduce the reliance on gas-for-power.
Overall, stakeholders should remain vigilant and adaptive to the dynamic nature of the energy market as we move into August. Staying informed about these key factors will be crucial for navigating the potential volatility in gas and power prices.
Last 12 month market movements
As we examine the broader trends, this graph provides a retrospective look at the last 12 months in the monthly energy market. It charts the day-ahead wholesale prices for gas and electricity, illustrating the volatility and trends that have shaped the market over the year.
Oil Market Summary for Jule 2024:
The oil market in July 2024 exhibited notable volatility influenced by geopolitical events, economic indicators, and supply-demand dynamics. Here is a detailed overview of the key trends and price movements throughout the month:
Starting Price and Ending Price:
Brent Crude: Opened the month at $86.41 per barrel and closed at $78.63 per barrel.
WTI Crude: Began at $81.54 per barrel and ended at $74.73 per barrel.
Highest and Lowest Prices:
Brent Crude: Reached its monthly high at $87.55 per barrel and dipped to a low of $78.63 per barrel.
WTI Crude: Peaked at $84.06 per barrel and had its lowest at $74.73 per barrel.
Significant Changes:
Early July: Prices rose initially due to hopes of rising demand during the summer driving season and worries about Middle East conflicts potentially reducing global oil supplies. Brent reached $86.60 per barrel, while WTI rose to $83.38.
Mid-July: Oil prices fluctuated as fears of Hurricane Beryl disrupting production subsided and U.S. crude oil inventories saw a larger-than-expected decline. Brent peaked at $87.55 per barrel.
Late July: Prices fell towards the end of the month due to weak demand signals from China, expectations of a ceasefire in Gaza, and rising U.S. crude stockpiles. Brent closed the month at $78.63 per barrel, and WTI at $74.73 per barrel.
Average Prices for the Month:
Brent Crude: Approximately $82.92 per barrel.
WTI Crude: Around $79.46 per barrel.
Commentary:
July 2024 was marked by significant fluctuations in oil prices, driven by a combination of geopolitical tensions, economic indicators, and supply-demand dynamics. The influence of potential rate cuts by the U.S. Federal Reserve and varying expectations about global demand, especially from China, played critical roles in shaping market dynamics. The month saw a mix of bullish and bearish factors, with price movements reflecting the complex interplay between supply concerns, demand signals, and broader economic trends.
Understanding the energy market can be complex, but it's crucial for making informed decisions about your energy needs. That's where we come in. At The Smart Energy Company, we're committed to helping you navigate the energy market with ease. Whether you're looking to renew your energy contract or switch providers, we're here to help.
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