Gas and Electricity Year Ahead Wholesale costs are lower than in last week’s report. They remain significantly lower than most of 2021 / 2022 / 2023 but are still higher than 2020. The Oil price is unchanged at $75.
The US has appeared to favour Russia during initial peace discussions, but with a minerals deal between the US and Ukraine looking likely, this could motivate their continued support. President Trump’s criticism of Ukraine’s leadership has seen a reaction from other nations, who have been quick to express their support, providing more aid and applying sanctions against Russia and its allies. The possibility that additional Russian Gas supplies may become available to Europe this year, has eased prices.
EU Gas Storage levels have continued to decline, currently at 41% full compared to 64% last year, due to the ending of Gas supplies through Ukraine from January 2025 and some very cold spells across Europe. It was hoped that the EU would relax the Storage refill targets for 2025, to avoid injections when prices are high, as this pressure is inflating costs. However, it appears any changes will be effective from 2026.
The price direction of Gas still heavily influences Electricity. Over the last week Gas provided just 20% of generation, down from 44% the week before. This was due to Wind contributing 39% from 21%, Imports from Europe at 15% from 11% and less Electricity demand due to milder temperatures.
With the potential for energy prices to move in either direction, we would encourage customers that have Gas or Electricity contracts ending in the first half of 2025 and potentially further out, to discuss options with Indigo Swan and closely monitor the position.
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