Energy Market Update - 29 August 2024

The energy market opened with minimal changes compared to yesterday, with steady prices reflecting ongoing maintenance and geopolitical risks.

Natural gas prices in the UK remained stable, with the NBP Front Month contract trading at 93p/therm. The risk premium from ongoing conflicts in the Middle East and Eastern Europe continues to weigh on the market. Norwegian gas flows into the UK have decreased to 48mcm due to maintenance, which is expected to continue through September. Despite lower Norwegian flows, mild temperatures and average wind levels are helping to ease demand. EU gas storage is now nearly 92% full, matching levels from 2023.

Power prices showed mixed movements. The UK Day-Ahead Base load price is at £83.36/MWh. Mild weather across Europe, particularly above-average temperatures in France, Germany, and Italy, is expected to increase cooling demand in early September. UK wind power production is projected to be below average next week, at 5.5GW. The UK Front Month Baseload contract rose to £82/MWh, with the Front Season remaining steady at £92/MWh.

In other markets, Brent Crude oil slightly decreased to $78.65/bbl, and the EUA December 2024 contract held steady at €70.77/tonne. The TTF Front Month gas contract remained flat at €39/MWh, indicating a cautious market as the impacts of maintenance and global demand are assessed.

The market is closely monitoring ongoing maintenance activities and potential geopolitical developments, with the UK system expected to remain well-supplied in the near term.