Market Insight
Tony Jordan
25 May 2023

Market Insights 25/05/2023


A small downward movement on the prompt contracts, but stable on the curve, in yesterdays session – which mirrors many of the sessions in recent days.

This morning Ofgem have confirmed the latest Price Cap figures which, for the first time in 18 months, sees a reduction to the previous Cap thanks to wholesale prices lowering in recent months. The annualised ‘headline rate’ of £2,074 (effective 1st July to 30th September) is considerably below the current Cap level of £3,280 (effective 1st April to 30th June) but is superseded by the Governments Energy Price Guarantee at £2,500. The new Cap level is below the Government support level and therefore is no longer required for this period. Remember the annualised value is not what everyone will pay, and only applies to the ‘typical’ user. The key Cap numbers are the standing charge and unit rates which, for a dual fuel direct debit customer with a standard electricity meter, are:
Standing Charge 53p/day (elec), 29p/day (gas) – around £193/£106 per year respectively irrespective of usage.
Unit Rate 30.11p/kwh (elec), 7.51p/kwh (gas).

Yesterday saw the TTF June contract settle at €27.79 (from €29.13) and the NBP June contract at 64.37p (from 66.19p).

Norne remains on unplanned outage this morning and we see a flow level at 228mcm from Norway (224). Russian nominations showing Velke Kapusany at 36.8mcm (36.8) and Sudzha at 41.2mcm (41.2). Nord Stream remains unavailable. Gas storage showing at 66.48% full as per AGSI+. LNG vessels due to arrive in UK next couple of weeks is 8.

This morning we see the June TTF contract at €28, NO CHANGE to the previous settlement.

A quick check on some key contracts (rounded to nearest whole):
Curve TTF June €28, Winter €48 (vs €28 and €49)
Curve NBP June 64p, Winter 125p (vs 66p and 125p)
UK Gas NBP spot 67p (from 66p).
UK Power DA £85 (from £86).

UK power prices show the UK June Baseload contract at £77 (£79) and Winter at £135 (£137).

In other areas of the market Brent Oil is at $78 ($77) and EUAs are at €85 (€86). Henry Hub is at $2.40 ($2.32) and JKM is at $9.58 ($9.74) with TTF Equiv of $8.76 ($9.20).

Numbers in brackets show the previous reports value.