Energy Market Update - 14 November 2024
Gas and power prices showed slight downward pressure yesterday but maintained an overall stable stance, with European storage levels and consistent supply calming recent volatility.
European natural gas prices experienced minor declines as mild weather offset demand pressures, though expectations of colder weather next week have kept a degree of caution in the market. The TTF front-month gas contract closed at €43.67/MWh, down from €44.26, and the UK NBP front-month settled at 110.78p/therm, showing a slight decrease from 112.43p/therm. Today, however, TTF prices have moved up again to €45/MWh, likely due to forecasts of below-average temperatures and market adjustments.
Supply dynamics saw some shifts, with Slovakia securing a temporary agreement with Azerbaijan to make up for Russian supply that will cease at year-end. Germany has also moved to restrict Russian LNG imports, adding some uncertainty to supply channels. Gas flows from Norway remained stable, supporting system balance, with 344.8mcm/day delivered to the continent and 111.3mcm/day to the UK. EU storage levels are reported at 92.58% capacity, easing immediate concerns despite colder weather on the horizon. In the UK, four LNG cargoes are expected in the coming weeks, providing further support.
UK power prices displayed minor movements, with front-month baseload contracts down slightly to £91/MWh and front-season at £79/MWh. Base spot prices also eased to £106/MWh. On the continent, French nuclear output has improved, reaching over 46GW due to recent reactor restarts, which should help stabilise regional electricity supply. EUAs were down at €66/tonne, maintaining a softening trend, while Brent oil held steady at $72 per barrel, with limited movement across global energy benchmarks.
In summary, the energy markets are treading cautiously amid stable supply and the approach of colder weather, with the focus now on potential adjustments in gas flows and short-term weather impacts as winter progresses.