It’s warm and windy, so healthy renewables outputs are limiting gas-for-power burn and keeping a lid on prices from front to back (both near- and far-term delivery prices are trading sideways).
As has been the case since Putin turned off the taps (see chart below detailing Russian pipeline flows into Europe via Velke, Nordstream, Yamal), Europe is not having much luck where supply dynamics are concerned.
Overnight, a US federal court has ruled that Trump’s administration has exceeded the President’s authority in placing reciprocal tariffs on countries around the globe, and instead congress alone should wield the power that regulates commercial market drivers.
As you’d expect, the Trump Administration has appealed, citing the ruling as a “judicial coup” against a backdrop of ongoing negotiations with multiple countries (all of whom will no doubt be standing on the sidelines rubbing their hands at the prospect of a weakened Trump).
However, such an outcome would not be favourable for European/UK energy-users.
Should the ruling be upheld, Europe (very much a net energy importer) will be thrown back into frenzied competition with overseas fuel buyers (likely hindering efforts to replenish gas stocks ahead of the winter heating season).
In addition (and as awe all feared), Trump and Putin have gone from allies to enemies, with Trump seemingly giving Putin a couple of weeks to see sense until the US imposes tighter and tighter sanctions – accordingly, Europe’s chances of seeing Russian flows any time soon looks next to zero.
Norwegian flows have been predictably patchy due to annual summer maintenance -the outages at Troll over the bank holiday weekend are ongoing, with Gassco (Norwegian state owned) forecasting capacities will remain offline until the end of the month.
On the trading side, clients running flexible capability are encouraged to scale-in modest hedges over the coming days/weeks whilst markets still offer solid comparative value.
This month’s UK gas Day-Ahead averages are holding steady at 82p/therm (or approx. 2.8p/kwh excluding non-gas).
ELECTRICITY & CARBON
Electricity prices down the curve remain tethered to gas movements.
Winter-25 is printing £86/mwh at the time of writing (still someway above the £80/mwh lows printed on 1st May).
On the Carbon side of things, markets are flat and directionless with the benchmark Dec-25 delivery meandering in a very tight range (now at £51.60/tn – please see chart below).
Today’s UK electricity generation mix is bearish in nature reflecting warm and windy conditions – specifically, renewables are contributing 74%, thermal at 4% (gas and coal) and low carbon at 15% (nuclear and imports).
So far this month, electricity Day-Ahead averages have dropped off due to a reduction in gas-for-power burn over the last week or so – currently at £70/mwh (or approx. 7.0p/kwh excluding non-energy).
On the trading side, clients running flexible capability are encouraged to scale-in modest hedges over the coming days/weeks whilst markets still offer solid comparative value.
