Market Insight

Datasets reproduced in partnership with
logo of energy scan

Wed, 7th Feb ’24


  • UK gas demand is expected to fall over the coming days (see 5-day chart).
  • The UK system was only very marginally short at this morning’s open (demand outstripping supply) – in the main, supply/demand remains well-balanced with Norwegian and UKCS (Continental Shelf) flows back on the rise following the resolution of unscheduled outages at Troll (Norway) and Barrow (Cumbria), and LNG arrivals in good shape.
  • It’s been another day of neutral to bearish price action, with contracts all the way down the curve drifting marginally lower.
  • Prices remain soft off the back of wet and windy forecasts for most of February.
  • Whilst drivers are mostly bearish, prices remain supported at prospects of a colder spell toward the end of the month and of course geopolitical risk across the Middle East/Ukraine.
  • Despite recent withdrawals, European gas inventories remain at historically high levels (69% versus 5-year average of 57%).
  • Will we make it to the end of Winter-23 with more than 50% left in the tank?
  • Probably not, but reserves will still be very high for the time of year.
  • Monthly Day-Ahead averages are on target this month (so far) to achieve 70p/therm (or circa. 2.4p/kwh).


  • Looking to the continent, European near-term delivery prices rose marginally yesterday buoyed by expectations of a sudden decline in wind outputs and downward revisions of short-term temperature forecasts.
  • However, any bullish momentum was offset by multiple French nuclear reactors coming back online following outages.
  • Down the curve, prices finished the day marginally up mirroring gains in the gas and carbon market against a backdrop of balanced fundamentals.
  • Plentiful storage and persistent demand destruction are keeping a lid on any meaningful upside.
  • Given balanced key drivers, weather outlooks remain an obsession for market participants – so any flip-flop is causing prices to retest areas of support/resistance in what is essentially a tight rangebound market with Summer-24 now clearly on the horizon.
  • Only modest moves on the carbon markets – the main news yesterday was on the regulation side with the European Commission proposing an ambitious 90% greenhouse gas emission reduction target by 2040 and net-zero by mid-century.
  • The announcement is having little impact on European/UK emissions prices today as its impact is outside the market horizon (while the level proposed is in line with most expectations anyway).
  • UKAs (UK mandatory carbon allowances) remain at a significant discount to its European counterpart (EUAs) – see chart.
  • Our generation mix today is back to bullish – only 15% renewables versus 54% gas-for-power burn.
  • Monthly Day-Ahead averages for UK electricity are on target this month (so far) to achieve £54/mwh (or 5.4p/kwh).





How can we help?

How can we help?