In this weekly energy market update, we explore the fluctuations in the UK gas and power markets, highlighting key trends, insights, and factors driving changes from 30th September to 7th October 2024. Read on to understand how these developments could impact your business and help you make informed decisions about your energy contracts.
Snapshot of Weekly Energy Market Averages
Average Gas Price: 95.24 p/th (↑5.91%)
Average Electricity Price: £85.42/MWh (↑13.70%)
Gas and Power Market Overview
Gas Market
The UK gas market faced upward pressure over the past week, with prices ranging between 93.00 p/th and 97.98 p/th. Early in the week, gas prices climbed steadily due to rising tensions in the Middle East and cooler-than-expected weather, which increased the need for heating. Midweek, some profit-taking led to a brief pause in the rise, but prices quickly climbed again by the end of the week.
Start of the week: 93.00 p/th on Monday, 30th September
End of the week: 97.98 p/th on Friday, 7th October
Power Market Overview
Electricity prices also rose over the week, reflecting some of the same pressures seen in the gas market. Prices ranged between £81.50/MWh and £89.00/MWh. Early in the week, strong winds helped keep prices in check by boosting renewable power generation. However, as wind speeds decreased and reliance on gas-fired power generation increased, electricity prices trended higher.
Start of the week: £81.50/MWh on Monday, 30th September
End of the week: £89.00/MWh on Friday, 7th October
How Does This Compare to Last Week?
Period | Average Gas Price (p/th) | Average Electricity Price (£/MWh) |
Last Week (23/09/2024 - 30/09/2024) | 89.92 | 75.13 |
This Week (30/09/2024 - 07/10/2024) | 95.24 | 85.42 |
Percentage Change | +5.91 | +13.70 |
Gas Prices: The average gas price increased by 5.91%, rising from 89.92 p/th to 95.24 p/th. This increase was mainly due to geopolitical tensions in the Middle East and cooler-than-expected weather, leading to higher demand.
Electricity Prices: The average electricity price rose by 13.70%, climbing from £75.13/MWh to £85.42/MWh. The rise was driven by reduced wind generation and increased reliance on gas-fired power due to cooler temperatures.
Factors Driving Gas and Power Prices This Week
Key Influences on Gas Prices
Geopolitical Tensions: Rising concerns over the conflict in the Middle East, particularly fears of attacks on energy infrastructure in Israel and Iran, kept prices high throughout the week.
Cooler Weather: Colder temperatures across the UK and Europe increased the need for gas to meet heating demand.
Supply Concerns: While Norwegian maintenance is gradually wrapping up, risks of further delays or extensions kept the market wary, adding upward pressure on prices.
Key Influences on Electricity Prices
Weaker Wind Speeds: A drop in wind speeds reduced renewable power output, increasing the need for gas-fired power plants.
Increased Gas-for-Power Demand: As the weather cooled, demand for gas-fired generation increased, adding further pressure to electricity prices.
Geopolitical Concerns: The same tensions that affected gas markets also influenced power prices, creating uncertainty and adding to market instability.
Market Forecast for the Upcoming Week
Looking ahead, several factors could influence gas and electricity prices in the coming week:
Key Factors to Watch:
Norwegian Gas Flows: Norwegian maintenance is expected to ease, potentially increasing gas supply to the UK. However, any delays could continue to limit supply and keep prices elevated.
Weather Trends: Cooler temperatures are expected to persist, which may maintain higher demand for heating, especially as we head further into autumn.
Wind Generation: A forecast for stronger wind speeds later in the week could increase renewable power generation, which would help ease some of the upward pressure on electricity prices.
Geopolitical Developments: Any new developments in the Middle East could cause further market volatility, impacting both gas and power prices.
Client Success Story
At The Smart Energy Company, we provide ongoing insights and tailored advice, helping businesses secure the best rates at the right time.
"I've worked with a lot of energy brokers and unfailingly they just want a quick transaction after a 5-minute call. The Smart Energy Company sent us weekly pricing and shared sector insights for several months before we signed paper. How could we use anyone else? Also, they found the best pricing. We did check."
-- Chris DuCousso, Director, Gym Owner
Weekly Oil Market Summary: 30th September - 7th October 2024
While our main focus is on gas and power, the oil market is closely tied to these energy sources. Changes in oil prices can influence gas and power costs, particularly when supply disruptions occur or geopolitical tensions increase.
Key Movements:
30/09/2024: Brent crude settled higher at $71.98/barrel, supported by China's stimulus measures to boost economic growth.
02/10/2024: Oil prices rose sharply after Iran fired missiles at Israel, raising fears of a wider conflict that could impact regional supply.
07/10/2024: Oil prices ended the week with their largest gains in over a year due to concerns about potential attacks on oil facilities in the Middle East.
Conclusion & Advice for Businesses
With both gas and electricity prices rising due to supply concerns, geopolitical tensions, and seasonal demand shifts, this week presents challenges for businesses. Here’s what you should consider:
Potential Risks: With energy prices rising, businesses should be cautious about locking in contracts at higher rates, but waiting too long could bring further increases.
Strategic Timing: Keeping an eye on market forecasts and acting when prices show signs of stabilising could result in better contract terms.
Stay Updated: Following our weekly updates can help you understand the right time to secure energy contracts, providing opportunities to save.
For tailored advice and a free, no-obligation quote, get in touch with us today.
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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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