Energy Market Update - 27 November 2024

Energy prices continued to decline on Tuesday, supported by steady gas flows, strong LNG supplies, and improved market confidence in near-term availability.

Russian gas transiting Ukraine is confirmed to continue through 2024, easing previous concerns despite unresolved post-January 2025 arrangements. Austria’s OMV announced it would halt payments to Gazprom after a €230m court ruling, but this had little immediate impact on flows. LNG shipments to Europe increased significantly, with an additional 15 U.S. cargoes arriving in November. This shift reduced reliance on storage and reflected Europe’s pricing advantage over Asia, where LNG arrivals dropped by 16 cargoes.

Gas prices softened further, with the NBP Day-Ahead at 117.98 p/therm, down 3.75 p/therm, and January 2025 contracts losing 2.7 p/therm to settle at 119.51 p/therm. TTF Front Month dropped to €46/MWh. Robust European gas storage, at 87.39%, and milder weather forecasts added to the bearish outlook. Lower demand expectations also pressured UK power prices, with the Day-Ahead Baseload contract falling to £106.25/MWh despite lower nuclear output and weaker wind speeds early in the week.

Geopolitical developments offered further stability. Gazprom’s indication that Ukraine transits may end in 2025 had limited market impact as expectations were already priced in. A ceasefire between Lebanon and Israel calmed oil markets, pushing Brent crude down 2% to $72.81/bbl. EU carbon prices eased to €69.23/tonne as energy price pressures lessened.

Today, early trading shows continued declines, with NBP Day-Ahead opening at 116.50 p/therm and UK Baseload power at £100/MWh. LNG arrivals and mild weather are expected to maintain this downward trend through the week.

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Energy Market Update - 28 November 2024

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Energy Market Update - 26 November 2024