Welcome to our 'Weekly Energy Market' update, where we dissect the latest trends and changes from 8th July to 15th July 2024. Your guide through the fluctuations of the last week: revealing trends, insights, and forecasts in the UK energy and gas markets.
Weekly Energy Market At A Glance
Gas Market Overview
The gas market experienced notable fluctuations throughout the week. Here's a summary of the key movements and factors influencing the market:
08/07/2024: NBP DA traded lower at 77.75p/th from 78.40p/th, aligning with loose fundamentals and minimal upside factors. The market continued its rangebound path with drops in gas for power demand.
09/07/2024: NBP DA saw a significant drop to 74.50p/th due to the easing impact of Storm Beryl on U.S. LNG infrastructure, marking its lowest level since mid-May.
10/07/2024: NBP DA fell further to 72.10p/th as market jitters eased further regarding Hurricane Beryl's negligible impact, with stable UK gas production and strong imports from Norway.
11/07/2024: Continued decline with NBP DA closing at 71.50p/th, influenced by a bearish market outlook and steady supply conditions, marking the fourth consecutive session of losses.
12/07/2024: Prices slightly increased, halting the four-day losing streak, closing at 72.75p/th driven by bullish influences from the LNG market and rising Asian prices.
15/07/2024: NBP DA inched up to 72.95p/th despite a looser supply side balance, supported by increased flows from Langeled and UKCS, and lower overall demand due to rising wind speeds.
Power Market Overview
Electricity prices showed similar patterns influenced by gas prices and weather:
08/07/2024: £74.50/MWh
09/07/2024: £68.00/MWh
10/07/2024: £73.75/MWh
11/07/2024: £71.00/MWh
12/07/2024: £74.00/MWh
15/07/2024: £70.75/MWh
Key Influences:
This week's energy market was shaped by a combination of factors impacting both gas and power prices:
Hurricane Beryl: Initially raised concerns about potential disruptions in U.S. LNG production, but these fears eased as the storm passed without significant damage.
Supply and Demand Dynamics: Increased UK domestic production following the resolution of the Tolmount outage and stable imports from Norway. Continuous storage injections and strong exports to the continent also played a role.
Weather Conditions: Fluctuating temperatures and wind speeds influenced both gas demand for power generation and overall electricity demand.
Market Sentiment: Mid-week price changes were influenced by market reactions to potential supply disruptions and geopolitical events, particularly related to Hurricane Beryl.
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 (1st July - 8th July 2024):
Average Gas Price: 77.82p/th
Average Electricity Price: £72.64/MWh
This Week (8th July - 15th July 2024):
Average Gas Price: 72.49p/th
Average Electricity Price: £72.67/MWh
Summary: This week, both gas and electricity prices showed notable changes compared to the previous week.
Gas Prices: The average gas price decreased from 77.82p/th to 72.49p/th. This decline was driven by several factors, including the easing impact of Hurricane Beryl on U.S. LNG infrastructure, stable UK gas production, and strong imports from Norway. Additionally, the resolution of the Tolmount outage contributed to the stable supply, further driving prices down.
Electricity Prices: The average electricity price remained relatively stable, with a slight increase from £72.64/MWh to £72.67/MWh. This stability was influenced by consistent gas prices, fluctuating renewable energy output, and local demand dynamics. Despite the minor change, the overall electricity market showed resilience amid the stable supply conditions and ongoing maintenance activities.
In summary, the gas market experienced a significant decrease in prices due to stable supply conditions and resolved outages, while the electricity market remained stable with a slight increase, reflecting steady market dynamics and renewable energy contributions.
Market Forecast for the Upcoming Week
Forecast for the Week Ahead:
Gas Market:
Stable Supply: We expect continued stable gas flows from domestic production and imports, with minimal disruptions anticipated.
Renewable Energy Impact: Higher wind speeds are forecasted, which may reduce the demand for gas in power generation, helping to keep prices stable or slightly lower.
Geopolitical Events: While there are currently no major disruptions expected, any unexpected geopolitical events, especially related to Ukraine or US LNG infrastructure, could impact prices.
Power Market:
Increased Renewable Output: Higher wind speeds and increased solar output are expected to continue, reducing reliance on gas for power generation.
Demand Dynamics: As temperatures are expected to remain below normal levels until at least 20th July, overall electricity demand might see minor fluctuations.
Maintenance Schedules: Ongoing and planned maintenance activities at key terminals and power stations could slightly influence market balance and prices.
Summary: Next week, we anticipate stable prices for both gas and electricity, driven by steady supply conditions and increased renewable energy output. However, businesses should stay alert to any unplanned outages or geopolitical developments that could impact supply dynamics and prices. Maintaining a close watch on weather forecasts and maintenance schedules will be crucial for anticipating market movements.
Weekly Oil Market Summary: 8th July - 15th July 2024
This week saw varied movements in the oil market influenced by economic data, geopolitical events, and market sentiment:
08/07/2024: Oil prices settled lower with Brent crude at $86.54/barrel and WTI at $83.16/barrel, influenced by the potential for a ceasefire deal in Gaza and concerns over Hurricane Beryl.
09/07/2024: Prices continued to decrease, with Brent settling at $85.75/barrel and WTI at $82.33/barrel, as Hurricane Beryl's impact on U.S. refineries and hopes for a Gaza ceasefire reduced supply disruption worries.
10/07/2024: Oil prices eased further; Brent at $84.66/barrel and WTI at $81.41/barrel, after minimal storm damage from Hurricane Beryl.
11/07/2024: Prices rebounded slightly due to a larger-than-expected decline in U.S. crude inventories; Brent at $85.08/barrel and WTI at $82.10/barrel.
12/07/2024: Prices rose for the second consecutive session, with Brent at $85.40/barrel and WTI at $82.62/barrel, driven by hopes for U.S. interest rate cuts following lower-than-expected inflation data.
15/07/2024: Brent crude settled lower at $85.03/barrel as weak U.S. consumer sentiment countered hopes for a Federal Reserve rate cut in September.
Overall: Oil prices fluctuated this week but showed a general downtrend due to easing supply disruption concerns from Hurricane Beryl and mixed economic data. Despite mid-week gains from inventory declines and interest rate cut expectations, the market sentiment remained cautious.
Key Influences
Economic Data: Mixed U.S. economic indicators, including weak consumer sentiment and hopes for interest rate cuts, impacted market sentiment.
Geopolitical Events: Potential ceasefire negotiations in Gaza and Hurricane Beryl’s minimal impact on U.S. oil infrastructure influenced price movements.
Demand Forecasts: Changes in global demand forecasts and U.S. crude inventory data supported mid-week price increases.
Market Sentiment: Overall market sentiment was cautious, with concerns about global economic stability and ongoing geopolitical tensions.
Market Forecast for the Upcoming Week
Looking ahead, several factors will influence the oil market:
Economic Indicators: Continued monitoring of U.S. economic data and Federal Reserve announcements will be crucial.
Geopolitical Developments: Ongoing tensions in the Middle East and any changes in OPEC+ production policies will impact prices.
Demand Trends: Seasonal demand increases and updated forecasts will play significant roles.
Supply Conditions: U.S. inventory levels and rig counts will continue to be key indicators to watch.
Overall, the market may see continued volatility with a potential for further price increases if demand forecasts remain strong and supply remains stable.
Advice for Your Business
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