Weekly Energy Market Update: 9th – 13th December 2024

Your Energy Costs Are Changing—Here’s What You Need to Know

Gas Market Insights

Average Gas Price: 110.98p/th

• Change: Down 5.51% from last week’s 117.45p/th

Gas prices fell this week, presenting a potential opportunity to secure lower rates for your business. Strong LNG supplies and milder weather forecasts contributed to this decline, ensuring a well-balanced system.

What This Means for You:

If your business relies heavily on gas, now may be a good time to lock in lower rates before colder weather drives demand higher in the coming months.

Key Highlights:

• Supply Levels Are Strong: With 11 LNG cargoes arriving soon, the market is well-supplied, helping keep prices down.
  
  
• Weather Is Helping Too: Milder temperatures reduced heating demand later in the week.
  
  
• Power Demand Spikes: Slight increases in gas-for-power demand midweek didn’t significantly disrupt the overall balance.

Electricity Market Insights

Average Gas Price:  £136.21/MWh

• Change: Up 30.94% from last week’s £104.00/MWh

Electricity prices saw a sharp increase this week, driven by volatile wind generation and colder periods that caused spikes in demand.

What This Means for You:

Higher electricity prices can impact your operational costs. Understanding when prices are likely to stabilise can help you better manage these increases.

Key Highlights:

• Wind Generation Volatility: Early in the week, wind output was strong, but midweek dips forced reliance on gas-fired power stations, pushing prices higher.

• Demand Peaks: Colder conditions midweek drove significant spikes in electricity demand, keeping prices elevated.

• Friday Surge: Prices closed at £215.47/MWh due to further drops in wind output and increased heating demand.

Oil Market Insights

Average Brent Crude Price: £72.45/barrel

• Change: Down 0.99% from last week’s £73.17/barrel

Oil prices remained stable this week, with slight fluctuations caused by geopolitical tensions and demand projections.



What This Means for You:

If your business is impacted by oil prices (e.g., transport or logistics), the current stability can help with predictable costs, but keep an eye on geopolitical risks for future volatility.

Key Highlights:

• Geopolitical Tensions: Regional instability following the ousting of Syria’s president added early-week risk premiums.

• China’s Growing Demand: Looser monetary policy and increased crude imports from China provided midweek support for oil prices.

• EU Sanctions: Further sanctions on Russian oil tightened supply midweek, balancing otherwise bearish market sentiment.

How These Trends Affect You

1. Gas Prices Are Down: A great time to review your contracts and consider locking in a better deal.
   
   
2. Electricity Prices Are Up: Monitor your energy usage carefully and look for ways to manage demand during peak times.
   
   
3. Oil Prices Are Stable: While stable for now, keep an eye on developments in global supply and geopolitical tensions.
   

Looking Ahead: What to Expect Next Week

• Weather: Continued mild temperatures could keep gas demand lower, stabilising prices.
  
  
• LNG Arrivals: Strong supply conditions are expected to persist, balancing the gas market.
  
  
• Renewables: Higher wind generation may ease electricity prices, but any drops in output could cause further spikes.
  
  
• Geopolitical Developments: Ongoing tensions in the Middle East could impact oil prices, creating uncertainty.

Your Next Steps

The energy market is constantly changing, but with the right insights and guidance, you can turn these fluctuations into opportunities.

At Smart Energy Company, we help businesses like yours secure the best energy contracts by monitoring market trends and providing expert advice tailored to your needs.

• Want to know if it’s the right time to lock in gas prices?

• Concerned about rising electricity costs?

We’re here to help. Contact us today to review your energy options and protect your bottom line.

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