Weekly Energy Market Update: 25th – 29th November 2024

Overview of This Week's Energy Market

This week has seen notable movements in gas, electricity, and oil prices, driven by changing weather conditions, strong LNG arrivals, and easing geopolitical tensions. Below, we break down the key developments across the markets to help you understand what’s driving prices and how it could impact your business.

Gas Market Insights

Average Gas Price: 117.45p/th
(Down 0.39% from last week’s average of 117.91p/th)

Gas prices trended slightly lower this week as stable LNG supplies and milder weather reduced heating demand. However, midweek saw a temporary spike due to colder temperatures and reduced wind power generation.



Key Highlights:

• LNG Arrivals: The UK’s LNG sendout remained robust, balancing the market despite minor maintenance at Norwegian facilities midweek.

• Weather Impact: Early forecasts for colder temperatures pushed demand higher on Tuesday but were balanced by milder conditions towards the end of the week.

• Supply Stability: South Hook LNG terminal maintained strong sendout levels, with high stock volumes ensuring a secure supply position.

Daily Movements:

• Start of the Week: Prices began easing as LNG cargo arrivals supported supply.

• Midweek: Slight increases in demand due to colder, calmer conditions temporarily lifted prices.

• End of the Week: Prices softened again, with average demand returning to normal.

Power Market Insights

Average Electricity Price: 104.00 £/MWh
(Up 9.99% from last week’s average of 94.55 £/MWh)

Power prices rose notably this week, primarily influenced by fluctuations in wind generation and demand shifts due to varying weather patterns.



Key Highlights:

• Wind Generation: Forecasts showed wind output rising to 16.5GW/day at the start of the week, reducing reliance on gas-fired power stations.

• Temperature Trends: Above-average temperatures reduced heating demand midweek, helping to keep prices in check.

• Demand Volatility: Despite higher wind output, demand fluctuations during colder periods kept power prices elevated.
  

Oil Market Summary

Brent Crude Average: £73.17/barrel

Oil prices were relatively stable this week, with small fluctuations driven by geopolitical developments and changes in global supply dynamics.

Key Highlights:

• Ceasefire Impact: A ceasefire deal between Israel and Lebanon initially reduced risk premiums in the oil market, bringing prices down early in the week.

• Midweek Stability: Prices stabilised after a surprise increase in US gasoline stock levels.

• End of the Week: Renewed tensions along the Israel-Lebanon border provided slight upward pressure.

Weekly Trends and Analysis

Gas and Power Movements:

• Gas prices fell as strong LNG supplies and reduced heating demand balanced the market.



• Power prices rose slightly due to intermittent wind generation and colder periods increasing heating demand.

Market Outlook for Next Week

Looking ahead, here are the key factors to watch:

1. Weather Conditions: Milder temperatures are expected to continue into early December, potentially reducing gas and power demand.
   
   
2. LNG Arrivals: Strong LNG supplies are forecast to persist, maintaining a stable supply outlook.
   
   
3. Geopolitical Stability: While the ceasefire in the Middle East has eased concerns, any escalation could add volatility to gas and oil prices.
   
   
4. Wind Power: Increasing wind generation could offset demand for gas-fired power, keeping electricity prices in check.

What This Means for Your Business

Volatility in energy markets highlights the importance of securing contracts at the right time. Falling gas prices and strong supply conditions may present opportunities to lock in favourable rates before colder winter periods drive demand higher.



At Smart Energy Company, we monitor market movements daily, providing insights and tailored advice to help your business secure the best deals.

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