In this week’s energy market update, we examine the key trends and shifts in the UK gas and power markets, influenced by changing temperatures, Norwegian production issues, and geopolitical tensions in the Middle East. Here’s a quick overview of the week’s developments from 21st to 28th October 2024 and what they mean for your business energy planning.
Snapshot of Weekly Energy Market Averages
Average Gas Price: 103.49 p/th (↑7.53%)
Average Electricity Price: £94.08/MWh (↑17.12%)
Gas and Power Market Overview
Gas Market
The UK gas market saw a substantial rise this week, with prices averaging 103.49 p/th, up 7.53% compared to last week. Early in the week, prices moved upwards due to colder weather forecasts, pushing demand higher. Midweek, prices spiked as maintenance issues at Norwegian gas fields continued, causing additional strain on supply.
The week closed with gas prices at 106.50 p/th on Friday, 28th October, reflecting concerns about potential supply competition for LNG due to Egypt’s gas shortages and possible Middle East disruptions.
Power Market Overview
Electricity prices experienced even sharper increases, with the weekly average climbing to £94.08/MWh, a rise of 17.12%. This was driven primarily by colder temperatures boosting demand and limited wind power generation early in the week. By the week’s end, electricity prices had reached £109.50/MWh.
How Does This Compare to Last Week?
Period | Average Gas Price (p/th) | Average Electricity Price (£/MWh) |
Last Week (14/10/2024 - 21/10/2024) | 96.23 | 80.36 |
This Week (21/10/2024 - 28/10/2024) | 103.49 | 94.08 |
Percentage Change | +7.53% | +17.12% |
Gas Prices: Average gas prices rose significantly, driven by colder temperatures and supply issues in Norway.
Electricity Prices: The sharp increase in electricity prices is primarily due to higher demand and lower renewable output.
Factors Driving Gas and Power Prices This Week
Key Influences on Gas Prices
Colder Weather Forecasts: An updated forecast indicated colder temperatures for early November, pushing up local demand.
Norwegian Production Issues: Ongoing maintenance at fields like Oseberg and temporary outages at Sleipner contributed to lower supply from Norway.
Geopolitical Tensions: Rising tensions in the Middle East, particularly regarding Israel and Iran, have stoked fears of possible supply disruptions, adding pressure to prices.
Key Influences on Electricity Prices:
Lower Wind Power Generation: Early in the week, lower wind speeds reduced renewable energy output, increasing reliance on gas-fired power.
Increased Demand: Colder temperatures spurred additional heating demand, putting upward pressure on electricity prices.
Market Forecast for the Upcoming Week
Looking ahead to the coming week, several factors could shape gas and electricity prices:
Norwegian Gas Flows: Norwegian supply levels are expected to improve as maintenance wraps up, though any new disruptions could cause further price increases.
Weather Trends: Forecasts for colder weather in early November suggest demand for heating will likely remain elevated.
Geopolitical Tensions: Ongoing conflicts in the Middle East may create additional price volatility, particularly if supply disruptions occur.
Client Success Story
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Weekly Oil Market Summary: 21st October - 28th October 2024
The oil market saw fluctuations this week, influenced by geopolitical tensions and mixed economic signals:
21/10/2024: Brent crude settled at $73.06/barrel, impacted by concerns over a global economic slowdown.
28/10/2024: Brent crude rose to $76.05/barrel, up 4% for the week as tensions between Israel and Iran raised fears of supply disruptions.
Conclusion & Advice for Businesses
With colder weather and increased demand driving up both gas and electricity prices, businesses should consider securing their energy contracts before winter price volatility intensifies. Here’s what to keep in mind:
Potential Risks: Energy prices could rise further with cold weather and geopolitical tensions. Locking in a contract now could protect your business from future increases.
Stay Informed: Following our weekly updates will help you identify the best time to secure energy rates and avoid potential price spikes.
Get Your Free Business Energy Quote
For more insights or to discuss your energy needs, get your free business energy quote now by visiting https://www.smart-energy.uk/free-business-energy-quote or calling us on 0151 459 3388.
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