Energy Market Update - 14 October 2024
The energy market saw a slight downturn to close last week, with prices holding close to key levels amid geopolitical concerns and continued Norwegian supply issues.
Gas markets experienced modest declines on Friday, as the TTF Front Month contract fell to €39.88 from €40.29, and the NBP Front Month contract closed at 99.37p from 100.42p. Ongoing unplanned outages at key Norwegian gas fields, including Oseberg, Kristin, Gullfaks, and Troll, have reduced flow levels to 316mcm from 321mcm, impacting supply. Russian gas nominations remained steady, with Velke Kapusany and Sudzha seeing only minor decreases. EU gas storage levels remain high at 94.93%, and three LNG vessels are expected in the UK within the next two weeks.
This morning’s trading saw further declines, with the TTF Front Month contract down €1 to €39. UK gas prices also softened, with the NBP Front Month contract down to 99p, while the Front Season contract fell to 95p from 96p. UK spot gas prices were 97p, down slightly from 98p. In the power market, UK Base spot prices rose to £105 from £88, while the Front Month Baseload contract remained stable at £87 and the Front Season held at £76.
In other markets, Brent oil remained stable at $79, and EU carbon allowances (EUAs) stayed at €65. Henry Hub gas prices declined to $2.63 from $2.68, while the JKM benchmark held steady at $13.08, with TTF equivalent prices also little changed at $12.80.
Looking ahead, UK temperatures are expected to rise above seasonal norms, reducing gas-for-power demand as wind output increases. Norwegian gas flows remain constrained by unplanned outages, although some fields are expected to return online soon. Europe’s gas storage remains near capacity, with minor withdrawals in some regions.