Good Morning! Here’s Your Energy Market Report for 22/11/2024
Welcome back to another daily energy market report update, where we break down the latest trends in the wholesale gas and power markets. Whether you’re looking to secure a better rate for your business or just stay informed, we’ve got you covered.
Day Ahead Price Comparison Table for 22/11/2024
Date | Gas UK NBP (p/therm) | Electricity UK Base (£/MWh) |
Today | 120.73 | 74.45 |
Previous Day | 121.90 | 105.75 |
Last Week | 116.00 | 104.00 |
Last Month | 101.25 | 91.50 |
Last Year | 109.99 | 79.50 |
Comparison | Gas % Change | Power % Change |
Daily | Down by 0.96% | Down by 29.60% |
Weekly | Up by 4.08% | Down by 28.41% |
Monthly | Up by 19.24% | Down by 18.63% |
Yearly | Up by 9.76% | Down by 6.35% |
Price Movements:
Gas:
The NBP Day Ahead gas price decreased slightly by 0.96% to 120.73p/therm.
Over the week, prices have risen by 4.08%, and a notable 19.24% rise is observed compared to last month, reflecting tighter market conditions during colder weather.
Year-on-year, gas prices have increased by 9.76%, driven by seasonal demand and geopolitical uncertainties affecting supply.
Power:
Electricity Day Ahead prices fell sharply, dropping 29.60% to £74.45/MWh as higher wind generation eased supply pressure.
While the weekly trend is down by 28.41%, the monthly comparison shows an 18.63% reduction, reflecting more stable generation conditions and milder weather over the prompt horizon.
Despite the decline, power prices remain 6.35% lower than last year due to improved renewable output and stable supply conditions.
Market Insights: What’s Driving Today’s Prices?
Gas Market
Norwegian Flows: Norwegian supply to the UK is up 9mcm/d as flows were redirected to the UK due to an outage at Kårstø, which is expected to resolve tomorrow.
Local Demand: UK gas consumption is forecast to drop significantly, with residential demand down 72mcm/d on the Day Ahead to 167mcm/d. Gas-for-power demand is also down by 26mcm/d at 37mcm/d.
Weather: Temperatures are rapidly increasing back towards seasonal norms, which has reduced heating demand and led to softer market fundamentals.
Geopolitical Risks: Russian President Vladimir Putin’s announcement of a missile attack on Ukraine added some initial bullish sentiment to the market, but this was offset by improving supply conditions.
Power Market
Renewable Generation: Wind speeds are expected to be very high through the weekend and into Monday, increasing renewable output and reducing reliance on gas-fired power generation.
Seasonal Temperatures: Milder temperatures are reducing overall heating and electricity demand.
Gas-for-Power: Lower gas-for-power demand (down 26mcm/d) has contributed to the sharp decline in power prices today.
Month Ahead Prices: What Can We Expect for December 2024?
Looking at Month Ahead prices for December, both gas and electricity markets remain volatile, reflecting the seasonal demand surge and geopolitical influences.
December 2024 | ||
Month Ahead Power | Today (open) | Yesterday (close) |
Gas (pence per therm) | 123.88 | 124.72 |
Electric (£ per MWh) | 103.77 | 102.99 |
Day Ahead vs. Month Ahead: What Does It Mean for Your Business?
Gas:
Month Ahead gas prices opened at 123.88p/therm, slightly down from yesterday’s close of 124.72p/therm.
Prices have risen significantly from 101.25p/therm at the start of October, marking a 22.33% increase over the last two months.
Power:
Electricity Month Ahead prices opened at £103.77/MWh, up slightly from yesterday’s close of £102.99/MWh.
Prices have risen from £91.50/MWh in October, reflecting a 13.36% increase, driven by the seasonal surge in demand and fluctuating wind output.
Market Implications:
Gas: The slight drop in Month Ahead prices suggests stabilisation after recent volatility but reflects strong seasonal demand overall.
Power: Despite today’s Day Ahead drop, the Month Ahead market remains strong, indicating potential upward pressure as colder temperatures return.
Market Trends Over the Last 6 Months
The chart above highlights sustained price increases in both gas and power markets:
Gas: Prices have climbed steadily from lows of ~65p/therm in May to over 120p/therm today, driven by seasonal demand, geopolitical risks, and tight supply.
Power: Electricity prices have experienced significant volatility, with strong gains since September, reflecting rising gas costs and fluctuating renewable output.
Oil Market Update – 22/11/2024
Brent crude futures climbed $1.42 to settle at $74.23/barrel, while WTI crude increased $1.35 to $70.10/barrel.
Key Drivers:
Geopolitical Risks: Rising tensions between Russia and Ukraine sparked fears of supply disruptions, boosting prices.
Norwegian Output: A temporary outage at Kårstø has reduced supply, although the impact is expected to be short-lived.
Chinese Demand: Higher crude purchases by China, the world’s largest oil importer, added support to the market.
Conclusion and Recommendations
With gas and power prices showing ongoing volatility and Month Ahead contracts continuing to rise, businesses are advised to secure competitive rates now.
Recommendation: Lock in fixed-rate contracts to protect against potential further increases in costs as winter demand and geopolitical factors drive market movement.
Get in Touch:
For tailored advice and competitive rates, contact us at The Smart Energy Company.
Phone: 0151 459 3388 Email: info@smart-energy.uk
Disclaimer: This blog provides insights into the market and should not be the only thing you use to make business decisions.
P.S. Remember, even if you’re not ready to switch yet, it’s always good to know what options are out there. Just let us know your contract end date, and we’ll make sure you’re looked after when the time comes.
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