Energy Market Update - 23 July 2024

The energy market remained stable today, with ample supply and increased LNG exports balancing out minor disruptions.

Natural gas spot prices were mixed yesterday as the market searched for direction. Norwegian exports to the UK stood at 83mcm/day, while Freeport LNG's resumption post-Hurricane Beryl slightly eased supply concerns. UK gas demand was 181mcm, with a supply forecast of 173mcm, resulting in an 8mcm undersupply. The NBP DA contract closed at 74p/therm, slightly lower than the previous session.

UK power prices followed gas trends, with a general decline observed across the curve. UK DA Base power settled at £73.50/MWh. French nuclear output for July averaged 37.1GW, with August projections at 34GW. The UK's nuclear output stood at 4.1GW, expected to rise in August. A reduction in wind output also impacted power prices, leading to a £0.25/MWh increase in the front-month spark.

Brent oil prices declined slightly to $82.40/bbl, reflecting broader market stability. EU carbon prices also saw a minor decrease, settling at €64.72/tonne. Coal prices remained steady at $111.68/tonne. The GBP/EUR exchange rate stood at 1.1874.

In conclusion, the market exhibits cautious optimism with stable supplies, despite minor shortfalls and ongoing maintenance. LNG exports are expected to bolster the market, while power prices adjust to fluctuating gas and nuclear outputs.