Gas and Electricity Year Ahead Wholesale costs are similar to last week. They remain significantly lower than most of 2021 / 2022 / 2023 but are comparable to 2024. Oil has fallen to $61 a barrel from $62.
Energy prices continue to benefit from the optimism that the ceasefire in Gaza will hold, despite some tensions. This makes it less likely that there will be disruption to Oil and Gas shipments from the region. As the attacks on energy infrastructure intensify, President Trump is renewing efforts to persuade both Ukraine and Russia to enter constructive talks. The planned ban on Russian Gas being used in the EU and the penalties against Russia’s trading partners, add pressure to global energy prices, so any progress is a downward influence.
Most of the last week saw very low levels of Wind generation and at just 17% of supplies, with a daily low of 4%, this meant we were heavily reliant on Gas at 43%. The position has improved in recent days. The last few years has seen the introduction of new Electricity Interconnectors between the UK and Europe, which are generally a reliable source of power. These connections with the likes of France, Norway, Belgium, Denmark, Ireland and the Netherlands, regularly provide 15% to 20% of our demand, but also allow us to Export.
EU Gas Storage remains low at 83% full compared to 95% last year. There is likely little opportunity to inject more as winter approaches, with the expectation that withdrawals will begin soon to meet an increased heating demand. This means that any forecast for below seasonal norm temperatures could have an impact on energy costs.
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.
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