Energy Market Update - 10 September 2024
The UK energy market saw mixed movement today, with NBP prices initially strengthening before retracing later in the session, influenced by a shift in demand and supply fundamentals.
NBP's front-month contract opened at 90.00p/th but dropped to 88.30p/th later in the day, reflecting a correction from recent highs. The UK gas system moved 11mcm long, supported by higher UKCS receipts and Norwegian exports. Total demand stood at 93mcm, significantly below seasonal norms by 115mcm. Cooler temperatures and reduced wind generation are expected to drive up demand further, while ongoing Norwegian maintenance continues to lend support.
In the power sector, UK DA Base prices fell to £35.50/MWh, helped by strong wind generation, which is expected to average 20% above the norm this week. Despite recent declines, prices are set to rise in tomorrow’s auction. The UK saw higher-than-average power imports from France, averaging 2.4GW in September, compared to 1.4GW the previous year.
Global energy prices remained volatile, with Brent oil hovering at $71.84/bbl, as concerns about weaker demand from China and the US persist. European carbon prices held steady at €66.52/tonne, while LNG arrivals are expected in the coming weeks, supporting stability in gas supply. Pan-European gas storage levels remain high at 92.99%.