Market Insights 25/02/2025

DAILY MARKET REPORT – 25/02/2025

A flat session in the end yesterday as small movements were seen overall.

This morning Ofgem confirmed the upcoming price cap effective 1st April at £1,849 as a ‘headline rate’ – much higher than forecast. We had forecast a value of £1,834 split at £930 for gas and £904 for electricity – showing gas being higher for the first time. However the final published values are split as £923 gas and £926 electricity showing a more closely even split.

The main differences between the final value and our forecast come in the wholesale element which is £10 higher than we forecast and operating costs £14 lower than we forecast with small differences on the other items by £1-2, giving an overall delta of £15 higher to our forecast.

As outlined in our post from a couple of weeks ago, the main driver to the increase has of course been the upward push in wholesale gas prices in particular over the last few months whilst the price cap has been calculating. It is far too early to forecast or predict the July cap.

Yesterday saw the TTF Front Month contract settle at €47.14 (from €47.20) and the NBP Front Month contract at 112.83p (from 112.33p).

Skarv on unplanned outage this morning and we see a Norwegian flow nomination level at 329mcm (326). EU gas storage showing at 40.60% (40.76%) full as per AGSI+. LNG vessels due to arrive in UK the next couple of weeks is 13 (14).

This morning we see the Front Month TTF contract at €47, NO CHANGE to the previous settlement.

A quick check on some key contracts (rounded to nearest whole):
Curve TTF Front Month €47, Front Season €47 (vs €47 and €48)
Curve NBP Front Month 113p, Front Season 113p (vs 112p and 113p)
UK Gas NBP spot 111p (from 109p)
UK Power Base spot £97 (from £71)

UK power prices show the UK Front Month Baseload contract at £94 (£91) and Front Season at £84 (£87).

In other areas of the market Brent Oil is at $75 ($74) and EUAs are at €74 (€74). Henry Hub is at $3.99 ($4.23) and JKM is at $14.34 ($14.18) with TTF Equiv of $14.47 ($14.46).

Numbers in brackets show the previous reports value.