Energy Market Update - 04 September 2024
Bearish sentiment continued in yesterday’s session, with prices falling across the board, following gains seen in late August.
European gas supplies remain steady despite reduced Norwegian output. Gas stocks are high, preparing for winter, while LNG deliveries are expected to remain stable. Stabilisation of tensions in the Middle East and Ukraine has led to some risk premiums easing. The TTF Front Month settled at €37.19 (from €38.58), while the NBP Front Month dropped to 89.37p (from 92.94p).
Gas flows this morning show steady conditions, with Russian nominations at Velke Kapusany at 38.4 mcm (from 37.8 mcm) and Sudzha at 42.3 mcm (42.4 mcm). EU gas storage remains robust at 92.52% capacity, while three LNG vessels are expected to arrive in the UK in the next two weeks. Front Month TTF is down €1 at €36, while NBP stands at 89p, slightly lower than yesterday’s close.
UK power prices saw a slight drop, with the Front Month Baseload contract at £76 (from £79), while the spot price also declined to £92/MWh (from £94). On the wider energy market, Brent oil softened to $74/bbl (from $78), while EUA carbon prices also dipped to €68/tonne (from €70/tonne).
In today’s session, the UK gas system opened 6 mcm/day shorter due to ongoing Norwegian maintenance. LNG sendout is nominated at 9 mcm/day, and temperatures are expected to stabilise after a peak on Sunday.