Weekly Energy Report – 06.09.23
Join us for our daily energy market report.
Hi everyone, its Natalie here today, coming to you from the catalyst digital energy studio here in Birmingham.
Today we take another look at the key drivers that are affecting the price direction of the UK gas and electricity markets, as we move closer to the end of summer and begin to edge closer to the potential for more volatile winter pricing.
In the gas markets prices have continued to consolidate within a narrow price range but have been consistently volatile and reacting to global market news. Mainly driven by concerns in the Australian liquefied natural gas supply chain, with threats of strike action impacting global commodity markets. This is likely to be a key market driver as the market considers the impact this could have on supply.
Despite exceptionally high storage levels across Europe ahead of this winter, this impacts global supply and demand fundamentals all before an uptake in required demand. Forecasts of a mild start to winter could help to dampen demand but the market remains in a fragile position and sensitive to geopolitical news.
As you would expect from all this uncertainty on gas prices and with continued volatility, electricity prices are having a hard time at the moment.
Similar to gas prices, electricity prices are also consolidating into a range but with bigger differences between high and low points as it reacts to strong renewable generation helping to keep the lid on prices. But will clearly take strong direction from which ever way gas prices trend with a strong link to supply and demand requirements as we move into the winter months.
With big influences from the weather fronts, windy weather will help to ease supply concerns.
But when it’s not windy we will be relying more on thermal generation and the price of gas at that time. The price of gas is likely to remain a strong driver for the next few weeks.
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