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Updated: Jun 20, 2022

Our latest Energy Update for June

With the UK inflation rate at its highest level for more than 30 years, and energy playing a major part in that increase, we review the major factors influencing gas and electricity markets across the last month.

Natural Gas Prices

The winter-22 contract was marginally less volatile than last month and continued to trade within a range between approximately 220-250 p/Th. Mid-May saw some downward pressure, despite Russia threatening to cease gas flows into Finland, as Germany and Finland released detail of plans to increase LNG imports. The below table gives a latest snapshot of gas pricing and the graph highlights movement in the winter-22 NBP price:

Further downward pressure came from the Asian market where Chinese demand continued to be muted, which was attributed to a rise in Covid cases and some consumers switching from LNG to coal. But prices soon strengthened as the EU wrestled over agreement for a ban of Russian oil imports, with Hungary the lone opponent. Eventually, the end of May saw agreement to ban all seaborne Russian oil imports, with Germany and Poland ceasing pipeline imports from 2024.

Negative price pressure continued into early June, with reports that the majority of EU gas storage units were at more than 50% capacity. In addition, north-west Europe will see strong LNG import volumes in the coming weeks. However, the downward trend was halted last week by news of a serious fire at the US Freeway LNG terminal, which will prevent any exports from the site for at least three weeks.

Power Prices

As usual, power prices have tracked the natural gas market, with attention keenly focused on matters arising out of the war in Ukraine. The below table gives a snapshot of current baseload prices, and the graph tracks winter-22 baseload pricing since the start of May:

At time of writing, power prices for winter-22 are up around £30/MWh since the beginning of May. In the same period, we have seen the winter-23 contract increase by a similar amount, while the winter-24 contract is up by circa £20/MWh.

The events in Ukraine currently dominating the news cycle are having an inevitable impact on energy markets, and the ripple effect is very much being felt down the forward curve. The introduction of sanctions, or measures to move away from reliance on Russian gas, will have repercussions on the market for years.

In the near-term, this week has seen some strengthening of power prices on the prompt following a forecast heat wave in France. There is apparently concern regarding the capability of the French nuclear fleet to cool their reactors during sustained extreme temperatures.


With no apparent end in sight to the war in Ukraine, many customers are nearing the end of their existing energy deals and having to face up to the inevitable sharp price increases. But our experience of the past 6 months suggests patience is key to securing the best rates. We noted above the £30/MWh uplift in winter-22 baseload prices since the start of May, but the graphs tell you this hasn’t been a linear increase, with prices on 23rd May dipping to where they started the month before rising again.

£30/MWh translates into 3p/kWh on your delivered price. Against a usage of 1,000,000 kWh, this results in £30,000 on your bottom line (plus taxes) and we’ve often seen intra-day swings greater than this, meaning intelligent procurement has never been more important. Although your choice of supplier matters, the timing of your next energy contract could be more significant than the destination.


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