Energy Market Update - 14 March 2024

Today's energy market is characterized by weakened demand forecasts due to bearish weather, maintaining mild conditions that continue to suppress gas demand.

The NBP Front Month Apr-24 contract is slightly down, trading at 62.20p/therm, with EU storages at 60%, indicative of reduced reliance on storages thanks to mild temperatures and strong wind generation.

Norwegian gas flows to the UK remain robust, with the UK system opening 13 mcm/day long, supported by above seasonal normal temperatures and increased flow from the Langeled pipeline. This, along with the closure of unscheduled maintenances in Norway, ensures a steady gas supply. The UK is set to receive four LNG cargoes in the coming weeks, with more headed to Northwest Europe, reflecting a stable supply outlook.

In terms of trading, the TTF Front Month contract settled at €25, showing stability. The UK power prices remain steady, with the Front Month Baseload contract at £59. This stability is mirrored in the oil market, with Brent Oil at $84, and in the gas market, with the Henry Hub at $1.66. The European gas market is well-supplied, supported by strong Norwegian flows and LNG arrivals.

The energy market maintains a steady stance, with no significant changes in fundamentals. Temperatures are expected to remain mild, with ample gas storage and continued strong supply from Norway and LNG cargoes. This scenario sets a stable groundwork as we approach the injection season, with market indicators showing little overall movement but indicating a well-supplied market.