State of the Energy Market – 24th May 2022

Daily Updates

Concerns over Russian supply have pushed the wholesale market for gas and power higher over the last few days across the curve. Due to refusals to pay in roubles, Russia has now halted all exports to Finland, Bulgaria, and Poland. However, gains are constrained by expanding European storage, which is already at 43% capacity, up from 36% at the same time last year.

Growing prospects of a hot summer could provide price support if cooling demand starts to contribute significantly to power consumption and puts pressure on wider fundamentals. In the immediate term, the forecast for Winter-22 pricing dynamics becomes a little more neutral, however shifts in the geopolitical picture may readily counteract the conventional supply direction.


June 22 wholesale gas prices closed at pence per therm on Monday, which was a decrease of -9% against the previous day’s closing price


Wholesale power prices for June 22 closed at £150.58 per MWh, which was a decrease of -4% against the previous day’s close.

In other energy related news:

  • Political pressure is mounting on the UK government to levy a one-time surcharge to help customers with increasing energy costs. However, in an open letter to the Prime Minister and the Chancellor, UK oil and gas service companies warned against imposing a windfall tax, claiming that it would not benefit consumers in the long run and would do nothing to address the cyclical nature of an energy system linked to global supply and demand. They also warn that any “surprise windfall tax” risks operators reducing their investment plans in reaction, which could have repercussions across the supply chain, affecting jobs and the communities that their sector supports.
  • Glassware production is energy intensive, and since the energy market has risen, the price has increased by 80% in the last year which has caused a glassware shortage. Due to this, beer fans may soon find it impossible to buy their beloved bottled beverage because of the shortage, however distributors are considering glass-free alternatives such as cans. This does not only harm the beer business, suppliers of wine and spirits from around the world are also affected.

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