Gas and Electricity Year Ahead Wholesale costs are higher than those in last week’s report but are significantly lower than most of 2021 / 2022 / 2023, although higher than 2020. Oil is $67 a barrel from $65.
Prices have remained relatively stable over the last month, having recovered from the low points when President Trump announced trade tariffs and China retaliated. The postponement of higher rates may mean that further announcements could have a further impact on energy costs.
EU Gas Storage levels continue to be a concern at just 51% full compared to 72% last year. There are reduced supplies from Russia after the Ukraine transit deal ended in January 2025. Should there be indications of prolonged periods of very low temperatures this winter, then prices could move higher. It was hoped that the peace talks between Ukraine and Russia would see the resumption of Gas flows in 2025, but that now seems unlikely, especially with the EU looking to end Gas supplies from Russia by the end of 2027. This means large numbers of LNG shipments will be needed. Current price pressures include the rising temperatures across Europe and Asia, which will add to air cooling demand, and production outages from Norway due to annual maintenance.
We have had a good contribution from Wind generation over the last week at 28% of supplies. This has reduced the need for Gas at 18%, which still has a big influence on the direction of Electricity costs. Imports from the continent via the Interconnectors were a stable 18%, with a high use on Friday and Saturday when Wind was lower in the UK.
We would encourage those with Gas and Electricity contracts that are due to end in the next few months and potentially further out, to engage with Indigo Swan and monitor positions closely.
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