Welcome to our 'Weekly Energy Market' update, where we delve into the latest trends and changes from 2nd September to 9th September 2024. In this update, we provide an overview of key fluctuations in the UK gas and power markets, highlighting trends, insights, and forecasts for the coming week.
Weekly Energy Market At A Glance
Gas and Power Market Overview
This past week, gas prices fluctuated due to ongoing maintenance in Norway, changes in demand, and weather patterns. Electricity prices also moved in response to gas-for-power demand and renewable energy output.
02/09/2024:
Gas: Gas prices rose by 3.15p/th, closing at 94.25p/th, the highest level so far this year. The price increase was driven by maintenance work in Norway, which reduced supply, and some issues at the Freeport LNG plant.
Power: Electricity prices were also high, closing at £93.75/MWh, due to the increased cost of gas.
03/09/2024:
Gas: Prices remained high, closing at 89.98p/th. Supply issues from Norway and reduced pipeline flows continued to push prices up.
Power: Electricity prices increased slightly to £92.00/MWh, reflecting ongoing high gas prices.
04/09/2024:
Gas: Gas prices dropped to 86.45p/th, as the impact of maintenance and supply disruptions began to ease.
Power: Electricity prices remained elevated at £79.35/MWh, still reflecting the higher cost of gas for power generation.
05/09/2024:
Gas: Gas prices continued to decrease, closing at 86.00p/th. The reduction in prices was influenced by lower demand and some supply improvements.
Power: Electricity prices dropped to £74.00/MWh, as the pressure on gas prices eased.
06/09/2024:
Gas: After several days of falling prices, gas prices edged up slightly by 0.8p/th, closing at 87.45p/th. Continued maintenance in Norway and increasing demand as the weather cooled contributed to the rise.
Power: Electricity prices increased to £80.75/MWh, following the slight rise in gas prices.
09/09/2024:
Gas: Gas prices rose again to 87.25p/th, driven by prolonged maintenance in Norway and cooler weather, which lifted demand.
Power: Electricity prices dropped significantly to £35.75/MWh, thanks to stronger wind speeds, which reduced the need for gas-fired power generation.
Key Influences:
This week's energy market was shaped by various factors influencing both gas and power prices:
Maintenance Work: Ongoing maintenance in Norway has reduced the supply of gas to the UK, keeping prices higher throughout the week.
Weather Conditions: Cooler temperatures increased local demand for gas, while higher wind speeds reduced the need for gas-fired power later in the week, lowering electricity prices.
Geopolitical Concerns: Global events, including supply issues at the Freeport LNG plant and tensions around Russian-Ukrainian gas supplies, also contributed to market uncertainty.
How Does This Compare to Last Week?
Gas and Power Market Comparison:
Last Week (2nd September - 9th September 2024):
Average Gas Price: 93.02 p/th
Average Electricity Price: £87.30/MWh
This Week (9th September - 9th September 2024):
Average Gas Price: 88.41 p/th
Average Electricity Price: £75.93/MWh
Percentage Changes:
Gas Price Decrease: 4.96%
Electricity Price Decrease: 12.98%
This week, the average gas price saw a decrease of 4.96%, dropping from 93.02 p/th to 88.41 p/th. The decline in gas prices was influenced by slightly improved supply conditions and the easing of some geopolitical concerns. Similarly, the average electricity price decreased by 12.98%, from £87.30/MWh to £75.93/MWh. This reduction in electricity prices can be attributed to higher renewable energy output, particularly wind generation, reducing the demand for gas-fired power generation.
Market Forecast for the Upcoming Week
Gas Market: With ongoing maintenance in Norway and cooler weather, gas prices are likely to remain elevated, though demand could decrease slightly as temperatures stabilise later in the week.
Power Market: Electricity prices are expected to stay lower due to strong wind speeds and an increase in renewable energy output, which reduces the need for gas-fired power generation.
Weekly Oil Market Summary: 2nd September - 9th September 2024
Oil Market Overview
This past week saw a continued decline in oil prices, driven by concerns over global demand, economic indicators from the U.S. and China, and potential increases in supply from Libya. Here's a breakdown of the key movements and factors influencing the oil market:
02/09/2024:
Price Movement: Oil prices retreated as investors anticipated an increase in OPEC+ supply starting in October. Brent crude futures for October delivery fell $1.14, or 1.43%, to settle at $78.80/barrel, while WTI crude fell $2.36, or 3.11%, to settle at $73.55/barrel.
03/09/2024:
Price Movement: Oil prices remained weak, with Brent settling at $78.80/barrel and WTI at $73.55/barrel.
04/09/2024:
Price Movement: Oil prices dropped nearly 5%, marking their lowest levels in nearly 9 months. Brent crude fell by $3.77, or 4.9%, to close at $73.75/barrel, while WTI fell by $3.21, or 4.4%, to settle at $70.34/barrel.
05/09/2024:
Price Movement: Crude futures continued to fall, with Brent crude futures settling down $1.05, or 1.42%, to $72.70/barrel, and WTI falling $1.14, or 1.62%, to $69.20/barrel.
06/09/2024:
Price Movement: Oil prices held near 14-month lows, with Brent futures closing at $72.69/barrel, down 1 cent, and WTI settling at $69.15/barrel, down 5 cents.
09/09/2024:
Price Movement: Oil prices fell 2%, with Brent crude futures settling at $71.06/barrel, down $1.63 or 2.24%, and WTI crude closing at $67.67/barrel, down $1.48 or 2.14%.
Key Influences on the Oil Market This Week:
Libyan Supply Resumption: News of a potential deal to resolve the dispute in Libya, which has halted crude production, put downward pressure on prices, as investors expect more supply to come online.
Demand Concerns: Sluggish economic growth in China, the world's largest oil importer, and weaker-than-expected U.S. jobs data contributed to concerns about global demand for oil.
OPEC+ Output: OPEC+ delayed planned output increases for October and November, providing some support to prices, though overall concerns about oversupply remain.
U.S. and China Economic Data: Weak economic indicators from both the U.S. and China reinforced expectations of a slower global economy, which further pressured oil prices throughout the week.
Market Forecast for the Upcoming Week:
Looking ahead, the oil market is likely to remain volatile, influenced by several factors:
Libyan Output: The resolution of Libya’s oil export dispute will likely increase supply, adding to the market's downward pressure.
Economic Data: Upcoming economic reports from China and the U.S. will continue to influence demand expectations. Positive data could help stabilize prices, while negative data might further depress the market.
OPEC+ Decisions: Any further announcements from OPEC+ regarding output plans will be closely monitored, as delays in production increases could offer some price support.
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