Welcome back to our weekly energy market updates. After a brief pause, we’re here to catch you up on the latest movements in the UK gas and power markets. Over the past few weeks, the markets have experienced significant activity, influenced by geopolitical tensions, fluctuating weather patterns, and varying supply conditions.
Since our last update, energy prices have been on an upward trajectory, with gas and electricity prices both climbing notably. Colder-than-expected weather forecasts and supply-side uncertainties have been key drivers, particularly as winter approaches and demand for heating increases. This week, we’ve seen gas and power prices reach new highs, underscoring the importance of monitoring the market for contract opportunities.
Now, let’s dive into the specifics of this week’s gas and power market movements.
Quick Overview: What’s Been Happening?
Over the past few weeks, UK gas and electricity markets have been on an upward trajectory. Prices have climbed due to a combination of colder-than-expected weather, increasing demand, and supply-side concerns. Geopolitical factors, such as tensions in the Middle East, as well as outages and maintenance at key production sites, have also contributed to market volatility. With winter now fully setting in, energy prices have reached their highest levels this year, making it a critical time to consider future energy contracts.
Here’s a breakdown of this week’s market movements:
Snapshot of Weekly Energy Market Averages
Average Gas Price: 113.69 p/th (↑11.02%)
Average Electricity Price: £107.38/MWh (↑2.75%)
Gas and Power Market Overview
Gas Market
Gas prices surged this week, averaging 113.69 p/th, reflecting an 11.02% increase compared to last week. Rising temperatures early in the period gave way to colder-than-expected weather, spiking heating demand. Norwegian supply also faced setbacks, including an unplanned outage at Åsgard, which added to tight market conditions.
The week ended with gas prices peaking at 116 p/th on 18th November, supported by bullish forecasts for colder weather and concerns about supply competition from LNG markets.
Power Market Overview
Electricity prices also climbed, albeit at a slower pace, averaging £107.38/MWh, up 2.75% week-on-week. The increase was primarily driven by stronger gas prices and colder weather increasing heating demand. While wind power generation provided some relief early in the week, it declined towards the end, increasing reliance on gas-fired generation.
How Does This Compare to Last Week?
Period | Average Gas Price (p/th) | Average Electricity Price (£/MWh) |
Last Week (04/11/2024 - 11/11/2024) | 102.43 | 104.50 |
This Week (11/11/2024 - 18/11/2024) | 113.69 | 107.38 |
Percentage Change | +11.02% | +2.75% |
Gas Prices: Prices soared as colder weather drove demand higher and Norwegian supply disruptions persisted.
Electricity Prices: Prices saw moderate increases, supported by stronger gas prices and reduced renewable generation later in the week.
Factors Driving Gas and Power Prices This Week
Key Influences on Gas Prices
Colder Weather: A sharp drop in temperatures midweek increased heating demand, pushing prices higher.
Norwegian Outages: An unplanned outage at Åsgard reduced supply to the UK, tightening the market.
LNG Competition: Rising global demand for LNG raised concerns about UK supply, further supporting prices.
Key Influences on Electricity Prices:
Lower Wind Speeds: Wind power output fell midweek, increasing the reliance on gas-fired power.
Stronger Gas Prices: The rise in gas prices directly influenced electricity costs, especially towards the end of the week.
Market Forecast for the Upcoming Week
Looking ahead, several factors are likely to influence gas and electricity prices:
Weather Trends: While temperatures are expected to remain colder than average, forecasts suggest a slight warming trend towards the end of the month.
Norwegian Supply: Repairs at Åsgard and other Norwegian facilities could ease supply constraints, but any further unplanned outages may push prices higher.
Geopolitical Tensions: Middle Eastern conflicts remain a significant wildcard, with any escalation potentially impacting global energy markets.
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Weekly Oil Market Summary: 11th – 18th November 2024
The oil market experienced mixed movements, with prices influenced by geopolitical tensions and economic uncertainty.
11/11/2024: Brent crude settled at $73.87/barrel, down 2.3%, as fears of supply disruptions eased.
18/11/2024: Brent crude dropped to $71.04/barrel, reflecting weaker Chinese demand and investor concerns about slowing global growth.
Conclusion & Advice for Businesses
The energy market continues to move upwards, driven by colder weather and supply uncertainties. Businesses with contracts up for renewal should act now to secure rates before the winter price volatility intensifies further.
Key Takeaways:
Gas and electricity prices are climbing. Delaying contract renewals may result in higher costs as winter demand peaks.
Stay informed. Follow our weekly updates to track the market and make data-driven decisions for your energy planning.
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For more insights or to discuss your energy needs, get your free business energy quote now by visiting https://www.smart-energy.uk/free-business-energy-quote or calling us on 0151 459 3388.
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