Wholesale gas prices have seen a decrease as energy providers shift to coal, which has become more cost-effective.
The key European gas contract experienced a drop of up to 3.9% today, reaching approximately €25 per megawatt-hour. This marks a decline of around 20% since the beginning of the year.
This trend is partly due to the reduction in carbon permit prices in Europe. These permits are part of a carbon emission trading system established in 2005, aimed at reducing greenhouse gas emissions by EU countries.
With the lower cost of carbon permits, it’s become less expensive for companies to use coal, which is typically a higher-polluting fuel.
Additionally, gas prices have been influenced by a mild winter, which curtailed demand, and the presence of high stocks of liquefied natural gas.
In the UK, the equivalent gas contract also dropped by as much as 3.9%, with the latest trading figures around 63p per therm.
Oil prices decline even with production reductions by the OPEC cartel.
Oil prices have retreated from their peak levels of the year following an announcement by the Opec+ group that it anticipates maintaining reduced crude oil production until the end of the next quarter.
The international standard, Brent crude, experienced a modest drop of 0.3% to around $83 per barrel, following a 2% increase in the previous trading session.
The US benchmark, West Texas Intermediate, saw a 0.5% decrease but remained near $80, having surpassed this key level for the first time since November on Friday.
This development occurred after the Opec group of oil-producing countries and their allies decided to continue their approximately two million barrels per day reduction in output until the end of June.
Moreover, oil prices have remained high partly due to the conflict between Israel and Hamas, where efforts towards achieving a ceasefire have been hindered.
