Energy Market Update - 26 July 2024

Gas prices in both the UK and continental Europe rose steadily yesterday, driven by technical factors and increased intra-day demand despite stable fundamentals. The NBP front month contract experienced a significant rise of 3.2p/th, marking a 4.5% day-on-day increase.

The market's upward movement was influenced by higher LNG demand in Egypt, leading to increased competition for European buyers. However, LNG supply in the region remains low due to ample EU storage and robust Norwegian gas supplies. Despite these supply pressures, overall demand has been moderated by strong nuclear availability from France, reducing the need for CCGT demand across NW Europe.

Gas flows from Norway remain stable despite the prolonged outage at Visund, with total flows reported at 333mcm/day. EU gas storage is at 83.52% capacity, ensuring supply security. TTF and NBP contracts showed minor fluctuations, with the TTF front month contract settling at €32 and the NBP front month at 74p. UK power prices followed gas trends, with the UK Front Month Baseload contract at £67.

In other markets, Brent oil prices remained stable at $82 per barrel, while EUA prices decreased slightly to €67. Henry Hub natural gas prices also saw a minor decline to $2.04. The energy market continues to be influenced by a combination of supply stability and fluctuating demand dynamics, with ongoing maintenance and weather conditions playing critical roles.