Headlines:
- Gas and Electricity Wholesale prices are higher than last week
- EU Gas Storage levels are a very positive 99% full
- Global events may create further price volatility
Energy Overview
Gas and Electricity Wholesale costs are higher than last week.
EU Gas Storage levels are 99% full, far exceeding the 90% target set for November, which is largely due to the high numbers of LNG deliveries being made to compensate for the reduced Russian Gas flows. Over the last year, Europe has increased its capacity to receive LNG. We can expect Storage levels to fall as colder temperatures increase the use of heating, although so far November has been mild. Energy markets will be watching the above factors very closely and reflecting the position in Wholesale costs.
Over the last week we have imported large volumes of Electricity from the continent through the Interconnectors, which was not always the case in 2022, when some French Nuclear generation went offline due to safety concerns. These imports reduced Gas generation over the last week to just 30%, which is low for this time of year. Wind contributed 25% of Electricity supplies.
The conflict in the Middle East is now adding less of a price premium to energy costs due to the relative stability in the region. However, as we saw at the start of the conflict and in reaction to other events such as the LNG strikes in Australia and the damage done to the Gas pipeline between Finland and Estonia, any news of potential issues disrupting the delicate supply and demand balance, could see price volatility.
Indigo Swan are advising customers to review contracts that end in 2023 or early 2024.
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