UK Energy Market Summary to Friday 23rd September 2022

Closing prices 23.09.2022

Last week saw further volatility across UK and European energy markets. Early in the week saw prices fall as markets awaited further Government announcements regarding support for UK businesses this winter.

On Tuesday NBP gas prices recovered from a two-month low reached amid cold weather forecasts. Despite high natural gas storage, NBP spot rose by 1.6% to settle at 8.7p/kWh. The price for Q4 22 delivery increased by around 6% to end at 14.8p/kWh.

Following the Government announcement last week winter 2022 prices increased mainly due to pressure in the market following the announcement of Government interventions. Markets also saw gains as Putin stated he would authorise a ‘partial mobilisation’ to help with the Russian war in Ukraine, equating to around 300,000 troops. This announcement saw fears that this could lead to an escalation in the conflict.

Further details of the UK energy support package for businesses can be found via the link below.

Energy Bill Relief Scheme: help for businesses and other non-domestic customers – GOV.UK (www.gov.uk)

UK electricity wholesale costs will be capped at 21.1p/kWh, with the maximum discount expected to be 40.5p/kWh.

UK wholesale gas costs will be capped at 7.5p/kWh, with the maximum discount expected to be 11.5p/kWh.

Other Energy Markets

Oil prices slumped on Friday to trade at levels not seen since January as the dollar index hit its strongest level in two decades, and on demand fears as rising interest rates risked tipping major economies into recession, cutting demand for oil.

Please contact hello@gleg.co.uk for a more detailed market analysis and expert view on how to navigate your energy procurement strategy through the current market volatility.