Energy Market Update - 18 September 2024
Gas and power markets are influenced by rising geopolitical tensions and Norwegian supply disruptions, with prices fluctuating amid ongoing uncertainties.
Yesterday’s 2% rise in NBP Day-Ahead gas prices, closing at 83.25p/therm, was attributed to extended maintenance at Norway’s Dvalin field and concerns over future supply risks. Norwegian gas nominations were 205.6 mcm/day, with additional unplanned outages at Oseberg tightening supply. This morning, the UK system opened long due to increased flows from the Troll field via Langeled, alongside resumed exports via the IUK and BBL pipelines.
UK power prices dipped on the spot to £78.25/MWh but saw gains on the curve. Forecasts of a 20% rise in wind generation next week may balance lower solar output. Geopolitical factors, including Russian attacks on Ukraine's energy infrastructure and tensions in Lebanon involving Hezbollah, are amplifying market volatility, despite stable domestic demand supported by mild weather conditions.
Geopolitical risks remain heightened, particularly with concerns over energy security in Ukraine ahead of winter and broader instability in the Middle East. European gas storage is 93.41% full, but the risk of further disruptions to supply is high, especially with Nord Stream remaining offline and Russian gas flows via Sudzha and Velke Kapusany continuing at reduced levels. Brent crude rose slightly to $73.70/bbl, while EU carbon allowances traded at €64.34/tonne.