Headlines:
- Gas and Electricity Wholesale prices are lower than last week
- EU Gas Storage levels are 44% full compared to 66% last year
- US and Russian talks regarding the war in Ukraine have eased energy costs
Energy Overview
Gas and Electricity Year Ahead Wholesale costs are lower than in last week’s report. They remain significantly lower than most of 2021 / 2022 / 2023 but are still higher than 2020. The Oil price is $75, down from $76.
The announcement last week that Presidents Trump and Putin had a conversation regarding Ukraine, saw Wholesale prices fall. Energy markets may be bumpy as they react to developments. Dialogue continues with a meeting between Russia and the US in Saudi Arabia to assess if wider peace talks can begin. It is hoped that at some point in the near future, Russian Gas flows into Europe could increase.
Germany has requested an easing of the Gas Storage refill targets, which have a number of milestones, but which end at 90% full by November 2025. This move is supported by other nations, as the pressure to inject Gas into Storage when demand and prices are high, is supporting price increases. EU Storage levels are just 44% full compared to 66% last year. Other factors which are influencing prices include, the concern that the US may impose tariffs on Europe, which could include LNG shipments and also the forecast of milder temperatures, reducing heating demand.
The low contribution of Wind to generation over the last week at just 21%, meant more Gas was required at 44%, up from 34% the week before. Gas sets the price direction for Electricity Wholesale costs. The Interconnectors with Europe provided 11% down from 14%.
With the potential for energy prices to move in either direction, we would encourage customers that have Gas or Electricity contracts ending in the first half of 2025 and potentially further out, to discuss options with Indigo Swan and closely monitor the position.
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