Market Insight

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Fri, 5th Jul ’24


  • Whilst Winter-24 delivery has enjoyed the biggest relative decrease since Dec ’23 (compared to all other Seasonal Forwards), it continues to meander sideways at the psychological price level of circa. 100p/ therm (where it’s been trading since 21st May ’24) – see chart.
  • The UK system opened long this morning and comfortably supplied despite an unplanned outage at Oseberg (Norway) having removed 7.5mcm/day (and the outage at Visund field having been extended by a further week taking another 7.4mcm/day offline).
  • On the demand side, Total UK demand is up 7mcm off the back of slightly weakened wind outputs.
  • Despite threatening to warm up, temperatures are again below seasonal norms today – we’re told to expect more of the same next week (with a brief return to seasonal average on Wednesday before cooling into the weekend).
  • Nonetheless, prices are marginally down this morning pressured in the main by high European storage levels (78% versus the 5-year average of 64%).
  • The General Election results came as no surprise with Labour winning a landslide – markets had already priced in the result.
  • We’re 96 days into Summer-24 with the onset of Winter-24 now 88 days ahead.
  • Europe remains on track to achieve 100% storage levels by Winter-24 (early Oct ’24) – though LNG delivery remains tight against a backdrop of sustained high temperatures across Asia (and the associated cooling demand).
  • Monthly Day-Ahead averages so far this month are on target to achieve 78p/therm (or circa. 2.65p/kwh excluding non-gas).


  • Looking to the continent, European near-term delivery prices yesterday cleared much lower than over the past few weeks thanks to a wind event that is crossing NW Europe.
  • The combination of high wind and solar outputs are putting a lot of stress on the grid during the day increasing the phenomenon of oversupply and, of course, price dips as a result.
  • On the Carbon markets, prices inched up to close at €70.76/tonne having failed to break above resistance at €71.6/tonne during the session.
  • As such, logic dictates that a retest of underlying support at €70/tonne is on the cards (speculators hate equilibrium!)
  • The COT (Commitment of Traders Report)  for the week ending 28th Jun ’24 was published yesterday.
  • It showed an increase in net-shorts positions from investment funds by 16.6% or (3 million tonnes) following the downward move from last week.
  • Back in the UK, UKAs (UK Carbon Allowances) followed our prediction that prices were due to fall (as indicated by RSI divergence) – now trading at circa. £46/tonne.
  • Prices are now in a confirmed ascending trend channel testing the mid-line – congestion is building at £40/tn as a strong area of support – so a retest of this level is likely if EUAs can pick up some bearish momentum.
  • Our electricity generation mix is bearish in nature today with renewables contributing 47%, thermal at 12% (gas and coal) and low carbon at 25% (nuclear and imports).
  • Monthly Day-Ahead averages so far this month are looking very summery, and are on target to achieve £56/mwh (or circa. 5.6p/kwh excluding non-energy).



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