Headlines:
- Gas and Electricity Wholesale prices are higher than last week
- EU Gas Storage levels are 88% full compared to 98% last year
- LNG shipments are heading back to Europe
Energy Overview
Gas and Electricity Year Ahead Wholesale costs are higher than last week. They show good value compared to most of 2021 / 2022 / 2023, but are still more than double those in 2020. The Oil price is unchanged at $73.
Although we are generally seeing an upward price trend, there were days of adjustment over the last week, where they fell. The colder temperatures both here and in mainland Europe have added pressure to EU Gas Storage levels, which are now 88% full, compared to 98% last year and recently losing almost 0.5% a day. The situation could deteriorate further from January 2025 when the Ukraine / Russia Gas transit deal ends, or sooner if the conflict escalates due to the increasing military support by other nations. Alternate transit arrangements are being discussed, involving using other countries buying Gas from Russia and then exporting it to Europe.
We have seen low levels of LNG shipments this year as they were attracted to the price paid in Asia. This is likely a key reason why EU Storage did not reach 100% full and the speed at which it is emptying. With European Gas prices moving higher and less of a need for supplies from Asia, deliveries are returning, which could help ease supply concerns. Thoughts are also focused on how low will Storage go and what will be available for winter 2025/2026.
A higher Wind contribution to generation over the last week at 35% of supplies reduced the need for Gas, which fell to 28%. Imports via the Interconnectors were stable at 13%. It has been confirmed that the Demand Flexibility Service (DFS) will start from the 27th of November and continue through 2025 rather than be just used over the winter period.
Some of the threats to supplies may not materialise and the more positive outlook could return, but due to the risks, we would encourage customers that have Gas or Electricity contracts ending in 2024 and early 2025, to discuss options with Indigo Swan and closely monitor the position.
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