Energy Market Update - 02 May 2024

The UK energy market opened slightly short today due to reduced exports from Norway and expected lower wind speeds, despite milder temperatures reducing overall demand.

Maintenance in Norway continues to impact gas exports to the continent, with total nominations down to 252 mcm/day. UK's gas storage injections have resumed after a period of withdrawals, maintaining stable supply levels, while LNG imports are bolstered by the expected arrival of one cargo next week and the anticipated operation of three more FSRUs in Germany. With the UK system slightly short, gas for power demand is predicted to rise as windspeeds are forecasted to fall below seasonal norms from tomorrow.

In terms of market prices, the TTF Front Month contract saw a slight dip, opening at €29 today with no change from the previous settlement, reflecting a stable market despite mild fluctuations. The NBP Front Month contract similarly adjusted, settling at 70p. This stability is echoed in UK power prices with the Front Month Baseload contract slightly decreasing to £61.

Overall, the energy market is navigating through a period of moderate fluctuations influenced by maintenance activities, LNG dynamics, and mild weather. With the current conditions expected to continue, the market remains cautiously optimistic, supported by robust infrastructure and import capabilities.