November saw a decrease in both Summer24 and Winter24 by c.a. 12% despite cold temperatures and further storms bracing the country. Throughout the cold snap, gas supplies remained very comfortable and were well supported by strong LNG cargoes and French nuclear availability. Fears of future supply risk were priced out the market with prices continuing to soften.
After Storm Babet in October, the UK experienced two further winter storms in November but neither had direct consequences on weather in Scotland. On 1st and 2nd November, Storm Ciaran brought wind gusts up to 81 mph to the south coast of England. This was followed by Storm Debi mid-November which brought winds exceeding 69 mph to the Irish Sea, causing a red weather warning to the Republic of Ireland. Despite these two storms, windspeeds ended the month below average. The combination of low wind and cold temperatures pushed day-ahead contracts up towards the end of the month to levels we haven’t seen since early Summer. This had little impact to most readers of this report, who will be focusing on fixed price contracts rather than being linked to a day ahead index.
With temperatures below seasonal averages in Scotland (A mere 4.4 degrees), there was less than 75% of average rainfall across the west coast of Scotland. On east coast, the opposite was the case, with weather fronts delivering 125% of rainfall. Comparatively, our neighbours had both warmer and wetter weather, with England average temperatures at 7.3 degrees and 120% of seasonal rainfall and Wales average temperature of 7.3 degrees with 108% of seasonal rainfall.
It is important to note that the EU had set a target for gas storage levels to be 90% full at 1st November 2023. This target was exceeded with gas levels at 96% (levels have been above 90% since Aug23). There is a reasonable degree of confidence that there will be a comfortable supply for the remainder of the Winter23 season which is having negative consequences on pricing for Summer24 and Winter24.
Wishing you all a merry Christmas, and best wishes for the new year.
The Greenspan Agency produce the report on a best endeavours basis and has been supplied for your interest; the facts in this report are for background information and should not be relied upon exclusively for decision making.
If you have any queries about the content in this report, please contact amy@greenspanenergy.com.
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