Headlines:
- Gas and Electricity Wholesale prices are lower than last week
- Trade tariffs are reducing economic and energy demand forecasts
- EU Gas Storage remains very low
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. The Oil price is $67 from $65.
Prices continue to benefit from the uncertain impact of tariffs on the global economy, and what that may mean for the demand for Gas, Electricity and Oil. There is still the assumption that the higher rates between the US and China and the lower rates applied to the UK, the EU and other nations, will reduce energy use.
EU Gas Storage remains extremely low at just 37% full compared to 62% last year. For some time, this has been adding upward pressure to Gas prices, with concern that levels may not recover to meet the additional winter heating demand. Since the start of April, the rate of injections into EU Gas Storage has been slower than in 2024. For now, the interim and the 90% full target by November remain, but it seems likely that there will be some flexibility, to avoid the forced purchase of Gas when conditions are not favourable. LNG deliveries are high, and partially compensating for the reduced flows from Russia, following the end of the Ukraine transit deal in January 2025. When dialogue began in February, there was hope that it would be reinstated this year, but a lack of progress means this seems unlikely.
The last week saw an increased Wind contribution to generation at 21%, up from 15%, which meant Gas was a lower 26% from 29%. Imports from Europe via the Interconnectors were unchanged at 20%.
It is not clear how a number of factors will influence prices, which include peace talks, Gas storage levels and tariffs. We would encourage those with Gas and Electricity contracts that are due to end in the next few months and potentially further out, to engage with Indigo Swan and monitor positions closely.
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