The June 2021 Gas price fell by 8.7% to 62.74p/therm last week as temperature forecasts improved across Europe. The improvements in temperature were matched by a steady increase in EU gas storage.
Norwegian gas production also saw an unexpected increase with production from the Oseberg field hitting a record high.
With widespread maintenance across a number of Norwegian gas fields and pipelines, this is a welcome boost to European gas supply. This increase to European gas supply has helped drive the price of UK LNG lower.
The June 2021 Power price saw a smaller fall of 3.6% to £75.06/MWh, tracking drops in the EU carbon market. Prices continue to remain very high, as EU gas storage remains in a fragile position and carbon sitting near record-highs.
The launch of the new UK carbon market has also placed UK energy prices in uncharted territory, with this risk feeding speculative concern in the markets, reducing the magnitude of price drops.
The Oct 2021 12 Month Gas price saw a fall of 8.3% to 57.50p/therm. This is driven by improvements in short-term weather forecasts, with temperature increases allowing EU gas storage to recover.
With EU gas storage nearing the 5-year minimum, injection now reduces the risk posed by potential Winter-2021/22 gas shortages.
The Oct 2021 12 Month Power price also saw a decrease of 5.1% to £69.44/MWh, as, with the advent of the UK carbon market, carbon appears to have reached a turning point, and fallen, bringing electricity prices with it.
Source: Beond Group
