Gas and Electricity Year Ahead Wholesale costs are lower than last week, but we are seeing prices increase today. Oil is lower at $103 from $109.
Following a deadline and threats by President Trump to destroy Iran’s infrastructure, a two-week ceasefire was agreed on the 8th of April. Energy costs began to fall with the expected reopening of the Strait of Hormuz, to allow approximately 20% of global Oil and LNG to be exported from the region. Unfortunately, there is little evidence this happened, with Iran charging fees and making threats. The weekend’s negotiations failed, apparently due to Iran being unwilling to give up their nuclear ambitions. In response the US will blockade Iran’s ports from today and deny them access to funds from the sale of Oil. The US and allies will attempt to clear the Strait of Hormuz of mines to hopefully encourage shipments, although the dangers and insurance will likely be issues. When the conflict does end, there will still be delays in resuming energy output, partly due to the damage done to key facilities.
EU Gas Storage levels are increasing at 29% full, but are still considerably lower than last year at 35% and 61% in 2024. The EU receives most of their Gas from Norway and the US, so although the disruption of supplies from the Middle East has less of an impact than to countries in Asia, global Gas markets are connected.
The last week saw a good contribution of Wind to our Electricity mix at 33%, which reduced the need for Gas to 15%. Imports from Europe via the Interconnectors were also lower at 14%.
We would encourage any customer with a contract that ends in the next few months, to discuss your renewals with us and we will look to provide additional market intelligence, guidance and support as required.
If you enjoyed reading this blog, why not try one of our others:
