Market Insight

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Fri, 31st May ’24


  • Having been at significant divergence throughout the second half of 2023, Winter-24/Winter-25 returned to parity in early 2024 and have been tracking gradually northwards in unison since the onset of Summer-24 (April) – see chart.
  • Prices for Winter-24/Winter-25 delivery broke through the psychological resistance level of 100p/therm on 22nd May ’24, and are hovering above to date – supported by a poor LNG arrival schedule, ongoing scheduled/unscheduled outages/maintenance and as yet unconfirmed supply risks to Austria (and potentially other European countries – at the hands of Gazprom).
  • Bullish drivers are being offset by strong renewable outputs across Europe and yesterday’s confirmation from Brussels that Germany has scrapped a levy on transit gas – which should see increased imports into neighbouring central and eastern European countries.
  • Also, high MRS (European storage at 69% versus the 5-year average of 52%) and reduced consumption are keeping a lid on any upside momentum.
  • At the time of writing, the UK system is balanced with below than average seasonal demand.
  • Although temperature forecasts have shifted lower overnight, with temperatures now expected to outturn to fall below seasonal norms for the majority of next week.
  • On the geopolitical side, continued conflicts in Russia and the Middle East (and associated worries over supply security) remains supportive.
  • On the supply side, recent outages to Freeport LNG (US) and Gorgon LNG (Australia) have disrupted global supplies throughout the week.
  • This was down to a combination of mechanical faults (with one of the three trains at the Gorgon facility) and reduced Freeport LNG production (down to 81%) due to power cuts.
  • Rising Asian LNG prices also remain supportive.
  • Consensus remains that Europe is on track to achieve 100% storage levels by Winter-24 (early Oct ’24).
  • Monthly Day-Ahead averages for May achieved 76p/therm (or circa. 2.6p/kwh excluding non-gas).
  • With 122 days of Summer-24 remaining, clients are beginning to look at scaling-in Winter-24 open volumes.


  • Looking to the continent, European short-term delivery prices eased to end the week, weighed by prospects of increases to hydro and wind generation (notwithstanding firmer fuels and emissions prices).
  • Next week, an expected rebound in solar production and French nuclear availability should keep the Day-Ahead market under pressure, although lingering weak wind outputs may offset a slight part of the weight.
  • On the Carbon markets, prices continue to track the gas market (see chart).
  • Back in the UK, UKAs (UK Allowances) are still on a bull run  – now trading at circa. £48/tn (Dec-24 benchmark) – having broken above the highs printed on 25th Mar ’24 and having breached overhanging resistance trendlines.
  • Our electricity generation mix is bearish in nature today with renewables contributing 49%, thermal at 8% (gas and coal) and low carbon at 29% (nuclear and imports).
  • Monthly Day-Ahead averages for May achieved £72/mwh (or circa. 7.2p/kwh excluding non-energy).



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