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CCS Weekly Market Report

By Crown Commercial Service Trading Team | Posted March 18, 2024

 

This week:

Gas and Power prices started the week off on a downwards trend, reacting to comfortable fundamentals. On Thursday we saw both gas and power prices rally, following the wider commodity complex upwards.

Gas

gas market movements
  • Temperatures have been milder and windier across the UK this week which has helped to reduce overall gas demand – both from power sector gas demand and domestic heating demand
  • Pipeline gas flows into the UK have reduced slightly this week both from Norway and from the UK North Sea, but due to lower demand there has been limited impact on prices
  • LNG storage stocks remain pretty full in the UK but sendouts have been lower this week. There are 4 confirmed cargoes due to arrive in the UK over the next 10 days
  • As mentioned above, UK gas prices made a pretty big rally yesterday afternoon finding support from stronger European gas markets and rallying Carbon and Oil prices

 

Power

electricity market movements
  • Overall power demand has been fairly similar to last week with no big movements
  • Wind generation has stepped up this week but we’ve seen solar generation step down – we should see solar start to increase as we move into the summer months
  • U.K. nuclear generation has stepped up this week as unit that was offline for unplanned maintenance has returned. We are due to see nuclear increase during the remainder of March as 4 more units are due to restart
  • Like gas, we seen power prices rally yesterday afternoon looking to take direction from the strengthening Carbon prices

 

Wider Commodities 

wider markets
Oil prices have made some pretty big moves during the latter part of this week and since last Friday front month Brent has gained >$3. Oil gained traction mid week on data showing US crude stocks had declined and on fears that further Ukrainian drone strikes would disrupt Russian production further. Yesterday saw further gains for Oil as the IEA’s latest report showed an upward revision for demand growth in 2024, along with a cut in supply from non-OPEC countries

European carbon started the first part of the week at lower levels and remained fairly stable. Yesterday, we saw Carbon rally managing to gain >€3 within day. Traders were left confused by the strong gain and were left explaining the rise to the stronger gas prices seen across Europe. Technical indicators also look to be playing a part for Carbon with resistance levels offering support

Coal prices started the week down on last weeks close but yesterday we saw a retracement and Coal has followed suit with the rest of the commodity complex moving upwards. Asian demand remains mixed, some supply constrains due to a force majeure incident in Indonesia are helping to support prices. With Ramadan now underway, this is likely to impact supply across Asia

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