Energy Market Update - 29 July 2024

The energy market opened at levels similar to Friday's close, maintaining stability amidst ongoing supply concerns.

Last week saw slight gains in the NBP markets due to supply fears, partly driven by issues at the USA’s Freeport LNG facility. Over the weekend, Freeport's output increased, stabilizing market sentiment. EU gas storage remains robust at 84.12%, mirroring last year's levels, while UK storage is at 53.80%. Above seasonal temperatures in the UK are expected to decrease demand, with daily forecasts trailing seasonal norms by about 30mcm.

Weak wind forecasts for the UK this week could lead to higher gas demand for power generation until wind levels return to normal next week. In Europe, fears of further conflict in the Middle East have risen following weekend missile strikes, potentially adding a risk premium to the market if tensions escalate.

Friday's session ended with minor gains in both the TTF and NBP Front Month contracts, which settled at €32.48 and 76.11p respectively. This morning, TTF Front Month is unchanged at €32, while NBP Front Month is at 76p. UK power prices saw the Front Month Baseload contract at £68 and Front Season at £85, reflecting steady demand and supply dynamics. Key contracts indicate stable but cautious market conditions as temperatures remain above average and global geopolitical tensions persist.