Welcome to our 'Weekly Energy Market' update, where we dissect the latest trends and changes from 29th July to 5th August 2024. Your guide through the fluctuations of the last week: revealing trends, insights, and forecasts in the UK energy markets.
Weekly Energy Market At A Glance
Gas and Power Market Overview
The gas market experienced notable fluctuations throughout the week. Here's a summary of the key movements and factors influencing the market:
29/07/2024:
Gas: NBP DA closed at 75.4p/th, driven by a slump in wind power generation and solid injections into medium storage.
Power: Electricity prices at £76.25/MWh.
30/07/2024:
Gas: NBP DA gained 2.8p/th to close at 78.2p/th, influenced by ongoing heat in Southern Europe and low wind power generation.
Power: Electricity prices at £77.25/MWh.
31/07/2024:
Gas: NBP DA rose by 1.55p/th to 79.75p/th due to maintenance in Norway and weak wind power generation.
Power: Electricity prices at £81.25/MWh.
01/08/2024:
Gas: NBP DA gained 2.45p/th to close at 82.2p/th amid geopolitical tensions and high gas-for-power demand.
Power: Electricity prices at £75.00/MWh.
02/08/2024:
Gas: NBP DA increased by 2.3p/th to 84.5p/th, influenced by pipeline outages and ongoing geopolitical tensions.
Power: Electricity prices at £59.00/MWh.
05/08/2024:
Gas: NBP DA declined by 1.1p/th to 83.4p/th due to a stronger windspeed forecast and increased Norwegian flows.
Power: Electricity prices at £72.50/MWh.
Key Influences:
This week's energy market was shaped by a combination of factors impacting both gas and power prices:
Supply Dynamics: Increased Norwegian flows and UK domestic production, along with maintenance activities impacting supply.
Demand Factors: Fluctuating wind power generation and cooler weather forecasts affecting gas-for-power demand.
Geopolitical Tensions: Developments in the Middle East, particularly involving Israel, Hezbollah, and Hamas.
Maintenance Schedules: Planned and unplanned maintenance in Norway and the UK.
These combined factors contributed to the observed trends and movements in gas and power prices throughout the week.
How Does This Compare to Last Week?
Gas and Power Market Comparison:
Last Week (22nd July - 29th July 2024):
Average Gas Price: 75.01p/th
Average Electricity Price: £73.60/MWh
This Week (29th July - 5th August 2024):
Average Gas Price: 81.46 p/th
Average Electricity Price: £73.54/MWh
This week, both gas and electricity prices showed notable fluctuations compared to the previous week. The average gas price increased from 75.01p/th to 81.46p/th, driven by maintenance activities, geopolitical tensions, and varying supply dynamics. The average electricity price decreased slightly from £73.60/MWh to £73.54/MWh, influenced by changes in gas prices, wind power generation, and cooler weather forecasts.
Market Forecast for the Upcoming Week
Looking ahead, several factors will influence the gas and power markets:
Stable Supply and Demand Dynamics:
Gas: Continued stable gas flows from Norway and the UK, with a focus on maintenance schedules impacting supply.
Power: Demand for gas-for-power is expected to remain high due to fluctuating wind power generation and cooler weather forecasts.
Renewable Energy:
Wind Speeds: Higher wind speeds are forecasted, which may reduce the demand for gas in power generation.
Geopolitical Events:
Middle East Tensions: Ongoing geopolitical developments involving Israel, Hezbollah, and Hamas will continue to impact market sentiment.
Weather Conditions:
Temperature Forecasts: Cooler weather forecasts may lift local consumption, influencing both gas and electricity prices.
Market Sentiment:
Investor Reactions: Market reactions to geopolitical events, economic data, and supply conditions will drive price movements.
We anticipate continued volatility with potential for further price fluctuations depending on geopolitical developments and economic data. For more detailed insights and personalised advice on managing your energy costs, get in touch with The Smart Energy Company. Subscribe to our blog for regular updates and stay informed about the latest market trends.
Weekly Oil Market Summary: 29th July - 5th August 2024
29/07/2024:
Market Movement: Oil futures fell about 1.5%, finishing the week lower due to declining Chinese demand, hopes of a Gaza ceasefire, and supply concerns.
Brent Crude: Down $1.24 (1.5%) to $81.13/barrel.
WTI Crude: Down $1.12 (1.4%) to $77.16/barrel.
30/07/2024:
Market Movement: Prices continued to decline, affected by weak economic data and geopolitical tensions.
Brent Crude: Down $1.39 (1.7%) to $79.74/barrel.
WTI Crude: Down $1.44 (1.8%) to $75.72/barrel.
31/07/2024:
Market Movement: Oil prices rebounded slightly due to large declines in U.S. crude and fuel stocks, but concerns over weak global demand kept prices subdued.
Brent Crude: Up 70 cents (0.9%) to $80.44/barrel.
WTI Crude: Up 63 cents (0.8%) to $76.35/barrel.
01/08/2024:
Market Movement: Prices rose following strong U.S. economic data, but gains were limited by concerns about lower oil imports from China.
Brent Crude: Up 66 cents (0.81%) to $81.10/barrel.
WTI Crude: Up 69 cents (0.89%) to $77.04/barrel.
02/08/2024:
Market Movement: Oil prices settled higher on Thursday after strong U.S. economic data, but gains were limited by concerns about lower oil imports from China.
Brent Crude: Up 32 cents (0.4%) to $81.42/barrel.
WTI Crude: Up 52 cents (0.6%) to $77.56/barrel.
05/08/2024:
Market Movement: Oil prices fell on Friday, with Brent reaching its lowest level since January, driven by weak Chinese economic data and reports of fewer-than-expected U.S. job additions.
Brent Crude: Down $2.71 (3.41%) to $76.81/barrel.
WTI Crude: Down $2.79 (3.66%) to $73.52/barrel.
Key Influences:
Economic Data:
U.S. Economic Indicators: Weaker-than-expected job additions and increased unemployment raised recession concerns.
Chinese Economic Data: Weak manufacturing activity and lower imports and refinery activity dampened demand growth expectations.
Global Manufacturing Activity: Declines in manufacturing activity across Asia, Europe, and the U.S. added to concerns about a sluggish global economic recovery.
Geopolitical Events:
Gaza Ceasefire: Anticipation of a ceasefire between Israel and Hamas influenced market sentiment, reducing the risk premium priced into oil.
Middle East Tensions: The conflict in Gaza and potential for a ceasefire impacted oil prices throughout the week.
Market Sentiment:
Investor Concerns: The potential for a global economic slowdown influenced market movements.
Stockpile Data: Large declines in U.S. crude and fuel inventories provided temporary support mid-week.
Market Forecast for the Upcoming Week:
Looking ahead, several factors will influence the oil market:
Economic Indicators:
U.S. Data: Continued monitoring of U.S. economic data, particularly job and manufacturing reports, will be crucial.
China's Economy: Further insights into China's economic performance and oil demand will influence prices.
Geopolitical Developments:
Gaza Ceasefire: Ongoing negotiations and potential agreements will continue to impact market sentiment.
Middle East Tensions: Watch for any developments involving Israel, Hezbollah, and Hamas.
Supply and Demand Dynamics:
Stockpiles and Inventory Levels: Changes in global crude and fuel inventories will be key indicators to watch.
Seasonal Demand: The end of the summer driving season in the U.S. may affect refinery runs and oil demand.
Market Sentiment:
Investor Reactions: Market reactions to geopolitical events, economic data, and supply conditions will drive price movements.
We anticipate continued volatility with potential for further price fluctuations depending on geopolitical developments and economic data. For more detailed insights and personalised advice on managing your energy costs, get in touch with The Smart Energy Company. Subscribe to our blog for regular updates and stay informed about the latest market trends.
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