Market Insight

Datasets reproduced in partnership with
logo of energy scan

Tues, 27th Feb ’24


  • The UK gas curve is starting to resemble a Mongolian camel! (see chart)
  • Summer-24 delivery prices are at a 30% discount to Winter-24 delivery.
  • Clients are increasingly hedging the low seasons with a view to seeing how Summer-24 conditioning impacts on the high seasons.
  • Whilst markets have been backwardated for the last few years, the front seasons are now contango, then a mixed bag thereafter!
  • Market context remains overwhelmingly bearish.
  • Europe is still expected to end the winter with significant surplus still left in the tank (currently at 64% versus the 5-year average of 54%).
  • Across Europe, temperatures look set to warm-up and demand is likely to drop-off throughout the week.
  • In the UK, prices opened lower this morning despite a short system (demand outstripping supply).
  • At the time of writing, however, prices are marginally up off the back of lower temperatures, the associated higher heating demand and technical momentum indicators very much in oversold territory (meaning a retracement/correction may be in the offing whilst market participants take a breath).
  • In addition, increased storage withdrawals and forecasts of lower temperatures for early March are also lending support/limiting any further downside – at least in the short-term.
  • On the supply side, Qatar has announced plans to increase LNG production by 16 million tonnes per year (meaning a total annual capacity of 142 million tonnes).
  • The announcement came hot off the back of Biden’s decision to pause approvals for new US LNG export terminals citing environmental conerns (with the election looming).
  • With Summer-24 now 33 days away,  surely only geo-political unrest poses any risk to a continuation of the prevailing long-term bear trend.
  • Monthly Day-Ahead averages are on target this month (so far) to achieve 64p/therm (or circa. 2.2p/kwh).


  • Compared to UK gas, UK electricity Seasonal Forwards are more orderly, with winters at least now very much in a contango state (future delivery prices higher than near term delivery prices) – see chart.
  • Summer-24 is at a 20% discount to Winter-24 prices.
  • Assessment prices for Summer-29 have dropped off the chart, printing at £49/mwh! (4.9p/kwh).
  • Looking to the continent, near-term delivery prices rose yesterday, buoyed by a drop in wind, lower temperatures and weak French nuclear availability against a backdrop of firmer fuels and emissions prices.
  • Down the curve, markets retraced from oversold conditions, with selling interest drying-up temporarily.
  • Forecasts of slightly lower wind output and temperatures for early-March supported the technical correction, but the fundamental picture remains overwhelmingly soft with a bleak demand outlook amid comfortable supply/demand dynamics.
  • On carbon markets, EUAs started the week with a noticeable 3.3% jump, likely triggered by some short-covering after 52 €/t proved strong support.
  • As allowances grow cheaper and more attractive for compliance (Industrial) players, it’s likely we’ll see some good buying interest at these low levels.
  • Most analysts have significantly revised downward their projections for carbon prices for 2024 over the past weeks, expecting a recovery at some point but seeing little reason for a renewed uptrend just yet due to the higher supply and lower demand anticipated in 2024.
  • UKAs finished the day at £35/tn for Dec-24 delivery.
  • Back in the UK, our generation mix bearish in nature with renewables contributing 44% and gas-for-power burn at 34%.
  • Monthly Day-Ahead averages for UK electricity are on target this month (so far) to achieve £59/mwh (or 5.9p/kwh).



How can we help?

How can we help?