UK Gas & Power: Prices Ease on Ample Storage and Rising Wind (July 9th - 15th)

VP Trading, Fanos Shiamishis, reports on energy market activity, covering the period 9^th July – 15^th July 2024. On our end-of-day pricing tool, The Source, we published an in-week high of £84.47/MWh for the Winter-24 seasonal power price on 9^th July. In this blog, Fanos shares the market news and updates from the last week. 

The UK gas and power market witnessed a predominantly bearish trend last week. Prices started lower on Tuesday, with both near-term and forward positions losing value. The UK gas system remained long, demand remained close to seasonal norms, limiting buying interest.

Wednesday saw a similar pattern, with prices opening higher before quickly dipping into negative territory. Ample gas storage in Europe, coupled with the expected resumption of operations at the Freeport LNG facility following Hurricane Beryl, contributed to the downward pressure. Declining wind output posed some price risk for UK power later in the week, the overall market sentiment leaned bearish.

Thursday displayed some intraday volatility, with the Winter-24 NBP price attempting but failing to break through the 94 pence per therm level. News regarding the exact restart date for Freeport LNG remained elusive, with a potential delay presenting an upside risk.

Friday concluded the week with European gas trading sideways, reflecting the continued comfort provided by high storage levels and healthy Norwegian flows. UK power mirrored this lack of direction, with mixed price action and low liquidity typical of a Friday session.

The week culminated on Monday with further softening in energy commodities. A long UK gas system was offset by rising Norwegian flows and increasing wind output. Limited interest beyond the Winter-24 contract in the UK power market underscored the subdued trading activity.