Weekly Market Update - Gas and power prices fall amid strong supply levels and low demand

Head of Sales Trading, Fanos Shiamishis, reports on energy market activity, covering the period 16th May – 23rd May 2023. On our end-of-day pricing tool, The Source, we published an in-week high of £142.00/MWh for the Winter-23 seasonal power price on 17th May. In this blog, Fanos shares the market news and updates from the last week. 

Last week, front-month TTF gas prices fell to a new 2-year low amid strong supply levels and seasonally expected low demand. Winter-23 UK Baseload power contracts also traded down, with interest focused further along the UK curve, with trades reaching out to Winter-26. 

Following its 3-day decline, Winter-23 power prices started to pick back up into the week, as well as interest increasing for near-term contracts, with June-23, July-23 and Q3-23 trading the most on Wednesday. Gas supply remains healthy as stock filling for next winter continues, however as China LNG imports reach a 5-month high, we could see a faster depletion of European gas stock later this winter. 

At the end of the week, prices opened level against the previous day’s closing price, with the UK gas system balanced and minimal trading interest across all seasons. Front-month TTF gas fell below the €30/MWh resistance level and continued to trade there, meanwhile, UK power also decreased, with only a little activity on Winter-23 and Summer-26 contracts.  

This week, gas and power opened softer, recovering some losses during the day. However, low demand, strong supply and mild weather added further downward pressure, causing UK power to see losses across the curve.