Energy Market Update - 23 October 2024
UK gas prices rose amid Norwegian supply issues, reduced LNG imports, and heightened geopolitical risks, with power prices following suit due to lower wind generation and demand dynamics.
An unplanned outage at Norway’s Sleipner field cut 7mcm in exports, lifting NBP prices. Limited LNG arrivals added pressure, with potential price increases needed to attract supplies to Europe. Geopolitical tensions also heightened with reports of possible Israeli military action against Iran and Ukrainian concerns over North Korean involvement. Meanwhile, UK gas-for-power demand rose due to weaker wind output, though temperatures are forecast to remain mild for the next two weeks.
Yesterday, the NBP Day-Ahead settled at 101.35p/therm, and UK Day-Ahead power at £91.02/MWh, with yearly highs in the gas curve as traders factored in supply risks. Reduced power imports and nuclear outages at Sizewell B and Torness further tightened the power market outlook, while the narrowing TTF Summer-Winter 2025 spread highlighted concerns over tighter gas balances.
Today, UK gas opened 14mcm long, with increased Langeled flows balancing lower LNG nominations. NBP spot prices rose to 102p/therm, supported by higher UKCS terminal receipts. Wind power is expected to improve, likely easing gas-for-power demand. EU gas storage stands at 95.32%, while upcoming French nuclear restarts aim to meet a projected demand peak of over 60GW next week.