Weekly market update - High storage levels, strong wind and reduced demand keep prices low

Head of Sales Trading, Fanos Shiamishis, reports on energy market activity, covering the period 13th – 19th February 2024. On our end-of-day pricing tool, The Source, we published an in-week high of £58.40/MWh for the Summer-24 seasonal power price on 13th February. In this blog, Fanos shares the market news and updates from the last week.  

As prices continued to decline last week, European LNG fell to an 8-month low on Tuesday, tracking European gas as storage remains at a record high for that time of the year, with mild and windy weather keeping demand in line. N2EX day ahead overnight product traded higher as wind generation was expected to fall and then recovered in the morning. The whole UK power curve traded lower, in line with gas and carbon falling. 

Into the week, unchanged bearish fundamentals continued to drive gas prices down. However, despite softening gas, UK power sellers were hesitant to follow the gas movement for some periods until later in the trading session. 

On Thursday, we saw a slight recovery on UK and European gas prices, possibly due to technical trading, as fundamentals remain unchanged. UK Power also traded slightly higher, supported by recovering emissions and gas markets. 

At the end of the week, Friday saw a relatively quiet day in the market. A one-day outage at the Kollsness gas processing plant in Norway caused a 10% reduction in Norwegian flow, and both gas and power closed marginally lower. 

On Monday, strong wind speeds and reduced gas for power demand saw near-term gas prices plummet despite cooler temperatures looming and heating demand expected to increase slightly.