Welcome to our 'Weekly Energy Market' update, where we dissect the latest trends and changes from 05th August to 12th 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 significant fluctuations throughout the week, influenced by various factors:
05/08/2024:
Gas: NBP DA prices declined by 1.1p/th to 83.4p/th, pressured by a stronger windspeed forecast and higher domestic production.
Power: Electricity prices stood at £72.50/MWh.
06/08/2024:
Gas: NBP DA dropped by 5p/th to 78.4p/th, following losses in its continental counterpart amid softer fundamentals.
Power: Electricity prices were at £56.00/MWh.
07/08/2024:
Gas: NBP DA gained 1.9p/th, closing at 80.3p/th, driven by a rebound in the TTF DA.
Power: Electricity prices increased to £64.75/MWh.
08/08/2024:
Gas: NBP DA rose by 1.7p/th to 82p/th, tracking gains in the TTF DA due to fears of potential Russian gas flow disruptions via Ukraine.
Power: Electricity prices decreased sharply to £19.00/MWh.
09/08/2024:
Gas: NBP DA fell by 4p/th to 78p/th amid overwhelming market looseness and a significant decoupling from the continental market.
Power: Electricity prices rebounded slightly to £54.75/MWh.
12/08/2024:
Gas: NBP DA rose by 4p/th to 82p/th, narrowing the wide spread from its Dutch counterpart, with a closing discount of 17.49p/th.
Power: Electricity prices increased to £74.00/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 higher UK domestic production contributed to fluctuations in gas prices.
Demand Factors: Variations in gas-for-power demand driven by changing wind speeds and temperature forecasts played a significant role.
Geopolitical Tensions: Fears of potential disruptions in Russian gas flows through Ukraine influenced market sentiment.
Market Decoupling: The UK gas market decoupled from continental Europe, with a significant widening of the NBP-TTF spread.
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 (29th July - 5th August 2024):
Average Gas Price: 81.46 p/th
Average Electricity Price: £73.54/MWh
This Week (05th August - 12th August 2024):
Average Gas Price: 82.15 p/th
Average Electricity Price: £56.83/MWh
This week, the average gas price saw a slight increase of 0.85%, rising from 81.46 p/th to 82.15 p/th. This increase was driven by ongoing geopolitical tensions and fluctuations in supply dynamics. On the other hand, the average electricity price experienced a significant decrease of 22.72%, dropping from £73.54/MWh to £56.83/MWh. This decrease was largely influenced by fluctuations in gas-for-power demand, wind power generation, and the cooling 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 potential supply disruptions due to ongoing maintenance schedules.
Power: Demand for gas-for-power is expected to fluctuate based on wind speed forecasts and cooling temperature trends.
Renewable Energy:
Wind Speeds: Higher wind speeds are forecasted later in the week, which may reduce the demand for gas in power generation.
Geopolitical Events:
Middle East Tensions: Ongoing geopolitical developments, particularly involving Russia and Ukraine, will continue to impact market sentiment.
Weather Conditions:
Temperature Forecasts: Cooler temperatures are expected, which could lift local demand slightly, 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: 5th August - 12th August 2024
This week saw significant movements in the oil market influenced by economic data, geopolitical events, and market sentiment:
05/08/2024:
Market Movement: Oil prices fell sharply, with Brent reaching its lowest level since January due to weak Chinese economic data and disappointing U.S. job reports.
Brent Crude: Down $2.71 (3.41%) to $76.81/barrel.
WTI Crude: Down $2.79 (3.66%) to $73.52/barrel.
06/08/2024:
Market Movement: Oil prices continued to fall amid a global stock market sell-off, though losses were limited by concerns over potential Middle East conflicts.
Brent Crude: Down 51 cents (0.66%) to $76.30/barrel.
WTI Crude: Down 58 cents (0.79%) to $72.94/barrel.
07/08/2024:
Market Movement: Oil prices rebounded slightly as attention shifted to supply tightness and financial markets stabilized.
Brent Crude: Up 18 cents (0.2%) to $76.48/barrel.
WTI Crude: Up 26 cents (0.4%) to $73.20/barrel.
08/08/2024:
Market Movement: Oil prices surged more than 2% due to a larger-than-expected draw in U.S. crude stockpiles, despite ongoing concerns about weak demand in China.
Brent Crude: Up $1.85 (2.42%) to $78.33/barrel.
WTI Crude: Up $2.03 (2.77%) to $75.23/barrel.
09/08/2024:
Market Movement: Oil prices continued their upward trend, buoyed by positive U.S. jobs data and the ongoing conflict in the Middle East.
Brent Crude: Up 83 cents (1.06%) to $79.16/barrel.
WTI Crude: Up 96 cents (1.28%) to $76.19/barrel.
12/08/2024:
Market Movement: Oil prices settled higher again on Friday, recording over 3.5% gains for the week, driven by positive economic data and signals from the Federal Reserve.
Brent Crude: Up 50 cents (0.6%) to $79.66/barrel.
WTI Crude: Up 65 cents (0.9%) to $76.84/barrel.
Key Influences:
Economic Data: Weak economic data from China and the U.S. initially drove prices down, but a recovery in U.S. economic indicators later in the week supported a price rebound.
Geopolitical Tensions: Concerns about a potential wider conflict in the Middle East following the assassination of key Hamas and Hezbollah figures kept supply risks in focus.
Supply Dynamics: A significant drawdown in U.S. crude inventories provided bullish support mid-week, as did concerns about lower production from Libya.
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:
Middle East Tensions: Ongoing tensions in the Middle East will continue to impact market sentiment and supply dynamics.
Supply and Demand Dynamics:
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.
Advice for Your Business
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