Energy Market Update - 20 November 2024
The energy market softened slightly yesterday as easing geopolitical tensions, steady LNG arrivals, and robust storage levels offset colder weather-driven demand increases across Europe and the UK.
In yesterday’s session, UK gas prices retreated slightly, with the NBP Day-Ahead contract settling at 114.75p/therm. Stable Russian flows via Sudzha at 42mcm/day and Norwegian exports at 340mcm/day supported supply, even as colder UK temperatures—6°C below seasonal norms—pushed LDZ consumption to 252mcm/day. LNG supply remains robust, with six shipments expected in the coming weeks, including one arriving today at South Hook Terminal. European gas storage stood at 90.30%, with withdrawals meeting seasonal demand during the cold snap.
Electricity prices followed the gas market trend, with the UK Day-Ahead Baseload contract closing at £98.18/MWh. Wind generation fluctuated around seasonal norms, while forecasts for slightly below-average wind speeds next week could maintain reliance on gas-fired power generation. Carbon prices eased, with EUA Dec 2024 settling at €68.13/tonne, further weighing on power curve prices. The UK Front Month Baseload contract fell to £97/MWh from £100/MWh, reflecting improved supply sentiment.
Global energy markets were shaped by escalating tensions between Russia and Ukraine, with the latter launching US-supported missile strikes. However, stable Russian flows and the diversion of LNG cargoes from Asia to Europe provided a stabilising influence. The JKM price in Asia rose to $14.78/MMBtu due to cooler weather, but Europe’s more attractive returns continue to draw LNG deliveries, underpinning supply resilience amid strong demand.
In related markets, Brent crude closed at $73.31/bbl for the M+1 contract, while coal prices held steady at $126.36/tonne (ARA CIF Cal Y+1). European gas contracts softened on improved supply, with TTF Front Month closing at €45/MWh. As temperatures normalise and LNG supply remains consistent, market stability is expected to continue into the coming weeks.