Market Insight

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Thurs, 22nd Feb ’24


  • Bias remains neutral to bearish, with volatility almost flat compared to the chaos of 2022 (see chart).
  • Temperatures remain above seasonal norms amid decent wind outputs (limiting gas-for-power burn).
  • Down the curve, Forward contracts are meandering on decent volume but with little discernible direction!
  • European gas fullness is at 65% versus 5-year average of 45%.
  • On the supply side, Norwegian flows are at steady capacity despite extended unscheduled outages.
  • Ample supply and historically high storage makes any potential upside risk to near-term delivery prices limited.
  • In short, the bear-trend that began in Q422 is still in place.
  • With Summer-24 only 38 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 65p/therm (or circa. 2.2p/kwh).


  • Looking to the continent, the fundamental situation is bearish until the evening and likely marginally bullish thereafter.
  • Demand is dropping on the weekly cycle.
  • Wind supply is lifted and solar power generation is climbing (as the days get longer).
  • Moderate to high winds are expected to persist across Europe for the next 10-days or so.
  • On the carbon markets, the weekly COT( Commitments of Traders Report) published yesterday showed marginally lowered speculative interest.
  • Prices remain in a narrow trading range, mostly due to the lack of auctions yesterday and support from investment funds.
  • Energy fundamentals are relatively weak and unsupportive – as such, carbon may continue to take direction from gas.
  • Back in the UK, our generation mix is bearish with renewables contributing 37% and gas-for-power burn at 23%.
  • Monthly Day-Ahead averages for UK electricity are on target this month (so far) to achieve £60/mwh (or 6p/kwh).



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