Headlines:
- Gas and Electricity Wholesale prices are lower than last week
- EU Gas Storage levels are 37% full compared to 61% last year
- 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 and significantly lower than most of 2021 / 2022 / 2023, but still higher than 2020. In recent days, prices have increased slightly as markets await further developments to global events. The Oil price is $69 from $71.
EU Gas Storage levels are now just 37% full compared to 61% last year. This is largely a result of reduced supplies from Russia after the Ukraine transit deal ended in January 2025 and also a colder winter in comparison to recent years. There is pressure to refill EU Gas Storage to 90% full by the 1st of November and hit interim targets. Some member states had asked for the 90% target to be reduced, but the intention is to extend it for another two years. Should some flexibility of the interim targets be allowed, this may help ease prices.
The recent price reductions can be attributed to the talks the US has had with both Russia and Ukraine to try to find peace, which may result in Europe receiving additional Gas from Russia. Although this would likely be welcome, the EU may choose to restrict supplies to prevent a resumption of an over reliance on Russia.
The price direction of Gas still heavily influences Electricity. Over the last week Gas provided just 28% of generation, down from 37% the week before. This was due to Wind contributing 27% from 19% and Imports from Europe at 18% from 16%. A drop in temperatures this week will likely increase demand for Gas and Electricity.
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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