Gas and Electricity Year Ahead Wholesale costs are higher than last week, although they still show good value. Oil is also higher at $65 from $64.
The US has reduced the tensions surrounding Greenland and will not apply 10% tariffs against countries that voiced opposition to their ambitions, as well as ruling out military action. This reduces the chance of vital US LNG shipments to Europe being used to pressure positions, and of an escalation of trade disputes, which would have likely impacted on energy costs.
The US is experiencing very low temperatures which could affect LNG shipments and costs. Low EU Gas Storage levels at 45% full compared to 56% last year, are once again beginning to pressure Gas prices. Cold spells across Europe have increased heating demand, with revised forecasts that levels may fall as low as 22%. This means more Gas will be needed through the warmer months for Storage, to be ready for Winter 2026/27 demand. An added concern is that the EU is banning Russian LNG from January 2027, and all Gas from October 2027, which will further reduce supplies. Gas tends to set the direction of Electricity Wholesale prices due to its high cost for generation.
The last week saw a higher contribution of Wind generation at 42% from 22%. This reduced the need for Gas at 24% from 42%. Imports were lower at 11%.
We would encourage those with Gas and Electricity contracts that are due to end in the next few months and possibly further out, to potentially take advantage of the competitive prices and to engage with Indigo Swan to monitor positions closely. Should you wish a monthly Price Projection for your energy contracts, please contact us to discuss.
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