Energy Market Update - 12 August 2024

The energy market exhibited a mix of stability and minor increases as supply dynamics balanced ongoing geopolitical tensions and forecasted weather patterns.

In Friday’s session, European gas prices edged higher, driven by steady flows from Russia and Norway, despite ongoing geopolitical tensions. Norwegian gas deliveries to the UK remained robust, despite a brief curtailment due to unplanned maintenance at the Kollsnes plant. Pan-European gas storage levels remained strong at 87.26%, with continuous injections observed.

The UK system opened with an 11mcm/day surplus this morning. Warmer temperatures are expected to peak today, supported by increasing wind speeds, reducing gas demand for power generation. Norwegian gas flows to the continent were slightly reduced due to ongoing maintenance. Export nominations from the UK to Europe persisted, with the NBP DA maintaining a discount to the TTF DA, encouraging continued exports.

Key market prices reflected a mixed trend today. The UK NBP Day-Ahead gas price stood at 82.00 p/therm, while UK Day-Ahead power prices were at £31.85/MWh. Brent oil prices slightly increased to $79.66/bbl, and EUA carbon prices settled at €70.14/tonne. The market remains cautious as LNG cargoes continue to head towards Europe amidst steady competition from Asia.

Overall, the market appears stable but is subject to potential fluctuations due to geopolitical developments and the forecasted weather patterns. The UK power market showed some resistance despite the bullish gas prices, primarily due to an expected increase in wind power generation for the rest of August.