Market Insight

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Fri, 23rd Feb ’24


  • Front seasons (Summer-24/Winter-24) are at a circa. 15% discount versus 1-month ago (see chart).
  • Both near- and far-term delivery prices are reminiscent of those last seen in the first half of 2021.
  • Supply/demand dynamics remain overwhelmingly bearish.
  • European storage is still at 65% versus the 5-year average of 45%, Norwegian flows to the UK/Europe remain steady, LNG arrivals are constant, and temperatures are forecast to rise back above seasonal norms by the middle of next week.
  • Whilst the UK system opened short this morning (demand outstripping supply), demand remains below seasonal norms.
  • With Summer-24 only 37 days away, only geo-political unrest poses any risk to a continuation of the prevailing bear trend.
  • Monthly Day-Ahead averages are on target this month (so far) to achieve 64p/therm (or circa. 2.2p/kwh).


  • Front seasons (Summer-24/Winter-24) are at a circa. 12% discount versus 1-month ago (see chart).
  • Looking to the continent, European short-term delivery prices experienced significant volatility yesterday amid very strong wind production, which then dropped off abruptly –  after which prices found support driven by a fall in temperatures and weakening French nuclear availability.
  • Next week, prices should find support off the back of colder and calmer weather against a backdrop of ongoing weakness in French nuclear availability – although prospects of stronger solar generation could offset bullish momentum.
  • Down the curve, prices are extending their decline pressured by declining fuels and emissions prices, comfortable fundamentals and lack of demand recovery as the end of Winter-23 is on the horizon.
  • On the carbon markets, EUAs reversed a 2-day retracement yesterday and resumed its downtrend plummeting to a 31-month low.
  • Prices remain on a downward trajectory – unchallenged by prevailing softness across the wider energy complex.
  • UKAs are still threatening to retest the psychological support levels of £30/tn.
  • Back in the UK, our generation mix is bullish in nature with renewables contributing 21% and gas-for-power burn at 39%.
  • Monthly Day-Ahead averages for UK electricity are on target this month (so far) to achieve £59/mwh (or 5.9p/kwh).



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