Energy Market Update - 21 August 2024

The energy market saw a decline in prices yesterday, reflecting a relaxation of the recent upward trend driven by geopolitical tensions in the Middle East and Ukraine-Russia conflict.

Progress in ceasefire talks in the Middle East and a lack of escalation on the Ukraine-Russia border have eased market fears, leading to a reduction in the risk premium that had built up over the past few weeks.

EU gas storage levels have surpassed the crucial 90% target well ahead of the November deadline, which may help cap prices in the short term, provided geopolitical stability continues. The TTF Front Month contract settled at €37.96, down from €39.85, while the NBP Front Month settled at 91.46p, down from 96.13p.

This morning, the market opened with stable gas flows and no unplanned outages. The TTF Front Month contract was unchanged at €38, while the NBP Front Month remained at 91p. UK power prices also softened, with the Front Month Baseload contract at £79, down from £83. The market remains cautiously optimistic, with steady LNG arrivals expected in the UK over the next few weeks.