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Flogas Enterprise’s Monthly Energy Review and Forecast Explains the Reasons Behind Recent Price Fluctuations

Lauren Stewart, wholesale gas prices

Lauren Stewart

Customer Relationship Manager
Wind turbines - F;logas Enterprise Report
  • The future of Russian gas supply remains a threat to contracts as Russia has proven to be an unreliable energy partner.
  • Carbon prices rose 6% month on month, trading above €85 /tCO2e for most of May.
  • Oil prices rallied by the close of the month after news that EU agreed upon a partial and phased Russian oil embargo.

7th June 2022 – Flogas Enterprise has today released their Monthly Energy Review and Forecast for May 2022. This report lists the latest price fluctuations for natural gas, electricity, oil, and carbon along with an explanation of the causes of these fluctuations. Additionally, the report forecasts what may happen to prices in the coming weeks based on an analysis of the global context in which the fuel markets operate.

Paul Kenny, General Manager, Flogas Energy said: “These monthly reports continue to deliver valuable insight to our customers regarding the causes behind various price fluctuations. There are some very interesting revelations within the report, which we hope our customers will find beneficial.”

One of many insights the report outlines is that the increased demand for gasoline during the US driving season supported oil prices during May. This trend is likely to continue into the summer months.

Meanwhile, average day-ahead gas prices saw a significant decline in May, down 45% month-on-month. At one point, prices dropped to a low of 38 p/therm, a price which has not been seen since November 2020.  However, day-ahead prices then rose 79% month-on-month making the mid-May savings a short-lived respite for the market.

In terms of price forecasts, it noted that there is a threat of short-term volatility on near-term contracts with July possibly seeing Nord Stream flows drop to zero. Maintenance season for pipelines could also see prices remain elevated to account for supply risk over the summer. Additionally, the future of the Russian gas supply remains a threat to contracts, as Russia has proven to be an unreliable energy partner and plugging the gap of this shortfall will create volatility in the market.      

For more information on visit www.flogasenterprise.ie 



Top Line Information from the Report

Natural Gas


Day-Ahead gas prices saw a significant decline in May dropping to a low of 38 p/therm, a price not seen since November 2020.  Day-Ahead prices then rose 79% week-on-week hitting the 100 p/therm mark again.  Prices closed the month at 130 p/therm making the mid-May savings a short-lived respite for the market.

Price Drivers:

Prompt prices dropped mid-May due to mild and windy weather dampening overall demand for gas in both heating and in the power generation mix.  Seventeen LNG vessels were also expected to berth at British terminals during May, offering a strong supply outlook, pushing the market into oversupply thus weighing on prices.


A significant premium on the front month maintained throughout May despite the prompt dropping to November 2020 levels. This suggests that there is little confidence in a sustained drop in prices.  Steady LNG deliveries will likely dampen volatility in the Day-Ahead gas market into June, with seven vessels already scheduled to berth at British terminals in early June. 

In addition, maintenance season is ahead of us with scheduled flow fluctuations expected through Nord Stream over the coming months and the ongoing threat to Russian supplies will create volatility for some time to come.



Day-Ahead power prices dropped to 7.98 c/kWh on the 11th May due to a drop in gas prices and a high prevalence of wind.  Wind generation was up 0.13% from the previous month averaging at 1,428 MW in May.

Price Drivers:

Partial outages at the East-West and Moyle interconnectors occurred in late May.  Renewables made up a healthy chunk of the fuel mix at 34% however, gas is making up a large portion of the mix at 55%. These elevated Day-Ahead power prices in May can be attributed to volatility in the gas market, which is up 43% year on year.  Carbon prices have contributed to little price fluctuation in May given they remained quite neutral due to the warm temperatures.


Day-Ahead power prices are closely linked to the gas market meaning that power prices will continue to be exposed to the volatility in the wider energy complex, which is being strongly influenced by developments in the war in Ukraine.



The lowest daily price registered in the month of May was $102.46/bbl on the 10th May.  Brent crude is still trading well above the $100/bbl, up 64% year on year. Oil prices rallied by the close of the month after news that EU agreed upon a partial and phased Russian oil embargo.

Pace Drivers

Concerns of a global recession weighed on prices mid-May due to high inflation and the prospect of high interest rates. Chinese coronavirus lockdowns have dampened demand for oil with reduced throughput of 5% from Chinese oil refineries between January and April. This is a drop not seen since the beginning of the pandemic.  Saudi Arabia added some bearish sentiment to oil prices after lowering the price of its light oil for June.


The possibility of EU sanctions on Russian oil continues to weigh on oil prices.  High demand for gasoline due to the US driving season supported prices during May. A trend likely to sustain into the coming month.



Carbon prices rose 6% month on month trading above €85 /tCO2e for much of May.  EUA prices trended downwards towards the end of May off the back of proposals to sell increased allowances from reserves to generate more revenue.

Price Drivers:

Warm temperatures kept the ETS in neutral territory, but volatility in wider gas markets will likely continue to influence the direction of carbon.  Increased consistency of trading on the UK ETS resulted in a small uptick to prices in mid-May.  The EU carbon market then declined due to weakening global markets and little trading on the EUA ETS.


Warmer weather, as we enter the peak summer period, will likely continue to dampen prices.  However, carbon markets will continue to be influenced by the availability of wind into next month as low wind outturn increases the demand for gas and coal fired generation to plug the gap.