Energy Market Update - 04 July 2024

UK gas prices opened slightly lower this morning, with the system comfortably long due to increased domestic production and strong wind generation.

Natural gas spot prices declined across European hubs yesterday, driven by expectations of stronger renewable generation. Norwegian exit nominations were at 334mcm/day, slightly lower due to ongoing maintenance at Visund. UK gas demand remained below seasonal norms, despite a slight increase. Curve prices edged lower, influenced by LNG fundamentals. On the power side, prices fell across the curve, with Pan-European stocks at 77.87% full.

The UK system opened 17mcm long this morning, supported by higher domestic production and steady Norwegian flows at 331mcm/day. Wind generation remains strong, with over 13GW expected today. Total UK demand dropped to 140mcm. Temperatures are forecast to remain below seasonal norms until 10 July, then rise above average. One LNG cargo is expected in the UK next week, with more arriving in North West Europe. Hartlepool 1 nuclear unit (0.6GW) returns from maintenance today.

Yesterday, TTF Front Month settled at €32.69, and NBP Front Month at 75.97p. Visund remains on unplanned outage. Russian nominations were stable, with Velke Kapusany at 40.4mcm and Sudzha at 42.4mcm. EU gas storage is at 77.87% full. This morning, TTF Front Month is unchanged at €33.

UK power prices showed significant declines, with Day-Ahead prices averaging £11/MWh due to high wind generation. The UK Front Month Baseload contract is at £69, and Front Season at £88. Brent oil is at $87.34, and EUAs are at €70.76.