Gas and Electricity Year Ahead Wholesale costs are lower than last week. They remain significantly lower than most of 2021 / 2022 / 2023 but are comparable to 2024. Oil has fallen to $62 a barrel as OPEC+ further increases production.
Energy markets have reacted well to the Gaza peace plan, which has reduced tensions in the region, making it less likely that there will be disruptions to Oil and Gas shipments. Unfortunately, both Russia and Ukraine continue to attack energy infrastructure, with Ukraine needing to replace Gas this coming winter. The US and the EU are looking to apply more pressure to Russia in the form of sanctions, increased military aid to Ukraine and financial penalties against Russia’s trading partners. China and the US still have unresolved tariff issues which may impact on global economies and therefore energy prices.
EU Gas Storage levels are 83% full, which is below the target and last year’s 95%, but higher than expected. They continue to slowly increase as Gas for heating is still low. Increasing levels of LNG have provided confidence that there will be enough Gas to meet reasonable demands, but also to be in a positive starting position to refill for winter 2026/2027. The US continues to invest in LNG terminals, helping to replace Gas supplies from Russia.
Wind’s contribution to generation has been very low at just 14% compared to 37% the previous week. This has increased the need for Gas at a high 46% and Imports via the Interconnectors at 15%. The National Energy System Operator (NESO) has said that the availability of surplus Electricity for this winter is at its highest since 2019/2020.
We would encourage those with energy contracts ending in the next few months and potentially further out, to engage with Indigo Swan and monitor positions closely.
If you enjoyed reading this blog, why not try one of our others:
