Energy Market Update - 28 August 2024

The UK energy market continues its upward trend, driven by geopolitical tensions and reduced gas flows due to upcoming maintenance.

NBP front-month prices have risen to 94.20p/therm, while the front-season contract stands at 106.75p/therm. This bullish movement is fuelled by ongoing conflicts in the Middle East and Eastern Europe. The lack of a ceasefire in the Middle East and escalating military actions in Ukraine, including control over key Russian territories, are contributing to the market's uncertainty.

The UK gas system remains well-supplied, with a surplus of 7.5 mcm despite reduced Langeled flows, which are down to 56 mcm ahead of planned maintenance. Oil prices have also increased, influenced by potential disruptions in Libyan oil exports amidst the nation's political instability. Additionally, European and UK spot prices rose in the previous session due to scheduled maintenance at Norwegian gas processing plants, which will further tighten supply.

Today's market sees steady gas flows, with no unplanned outages reported. TTF and NBP contracts show marginal increases, reflecting the ongoing geopolitical risks and scheduled maintenance, while UK power prices have gained along the curve, influenced by the bullish gas market and lower wind speeds.