top of page


Updated: Sep 21, 2023

We take our regular look at the current energy market conditions

In this month’s Energy Market Narrative, we review the factors driving wholesale price movement across February, the near-term market outlook given the current colder weather, and how businesses are determining when to pull the trigger on their energy procurement.

Natural Gas Prices

Gas prices continued to fall through February, with the winter-23 contract shedding around 27 p/Th across the month. Latest forecasts show UK temperatures will remain below seasonal norms until 12th March, with temperatures near zero and snow forecast in the south, but this has failed to reverse the market trend. The UK is receiving strong gas flows from Norway and storage across Europe is at 59%, well above the 5-year average and very healthy versus expectation coming into this winter.

The below graph tracks winter 23 and 24 prices since last August:

In mid-February the President of the European Commission, Ursula von der Leyen, claimed that Putin “…has already lost the energy war that he started”. The mild weather this winter has been a significant factor in this. But we have also continued to see an abundance of LNG arriving at European shores as relationships with US LNG exporters are further strengthened. Germany is building a series of floating LNG terminals and The Netherlands managed to reduce usage last year to their lowest levels since 1972.

However, there remains risk ahead of winter-23 and many commentators expect further competition for LNG imports to come from Asian markets, as China increases industrial activity. This could be impactful during the gas injection season, as European storage is being refilled, although today European and UK LNG prices remain at a premium to Asian markets.

Power Prices

UK electricity pricing has continued to benefit from the falling gas markets, with the winter-23 baseload contract reducing by around £25/MWh through February. Lower wind speeds are limiting renewables generation until later this week, which increases gas-for-power demand, but the system has continued to cope, and prices are holding.

The following graph highlights price movement across the winter-23 and 24 baseload contracts:

UK prices have failed to be impacted by ongoing French strikes, which has seriously reduced their nuclear output and taken France to a net import position. With UK temperatures rising from 12th March, which reduces gas-for-power demand, and forecasts showing improved wind generation from the same date, there seems to be no short-term factors outweighing the downward price pressures noted above.

In Summary

Falling market prices have reduced the cost to the taxpayer of the various government support schemes across this winter. This has prompted campaigners to lobby for an extension to the domestic Energy Price Guarantee for a further 3 months, which may save a median user an estimated £125 versus the status quo. It is understood this is under review, with no news either way at time of writing. However, there is no suggestion of the business energy EBRS/EBDS schemes being similarly reviewed, despite the so-called “cliff edge” for some businesses from 1st April.

The falling prices have prompted numerous customers to explore options for early renewal of energy contracts, wishing to take advantage of the market now rather than risk missing out. However, some customers have been happy to “wait and see” how much further prices may fall rather than lock-in too early. This is obviously a challenging guessing game at a time when crystal balls are in short supply. Decisions are being made based upon the level of risk aversity for individual businesses, and this may be something you wish to consider.

However, despite the positive sentiment above, it has also become clear that the full extent of reductions in wholesale prices are often not reaching the business customer. This is due to increased levels of business customer indebtedness, which has caused energy suppliers to further raise the bar in terms of who they will offer credit terms, and prices are being loaded with increased premia to mitigate the risk of failing businesses. BMU is here to support with an array of services designed to minimise the impact and stress of your energy renewals, so do contact us on 01484 506 410 if you need some help.


If you'd like more information about current market conditions or would like specific advice with your specific business needs, please don't hesitate to get in touch with us.

T: 01484 506 410 E:

Recent Posts

See All


bottom of page