Energy Market Update - 29 November 2024
European gas and UK power prices eased during Thursday’s session, with mild weather and increased wind generation pressuring prices downward. Supply concerns and winter uncertainties remain in focus.
Gas benchmarks saw mixed movements. The TTF Front Month contract settled at €46.68/MWh, down slightly from €47.22, while NBP Front Month eased to 117.55p/therm from 118.29p. Early trading today shows the TTF unchanged at €47/MWh, while the NBP holds steady at 118p/therm. Milder temperatures and strong wind forecasts for December, combined with robust LNG inflows, are stabilising the market, with 12 LNG cargoes expected in the UK over the next fortnight. However, despite a demand drop of 50 mcm yesterday, the UK system remains undersupplied by 11 mcm due to lower LNG sendout and storage withdrawals.
UK power prices also softened. The Front Month Baseload contract fell to £93/MWh, from £95, while the Front Season dipped to £83/MWh from £84. Spot prices remain stable at £100/MWh. A projected increase in nuclear availability and stronger wind output are reducing reliance on gas-fired power generation, adding further downward pressure to spark spreads. Looking ahead, temperatures are forecast to rise above seasonal norms this weekend, briefly dip early next week, then climb again, moderating near-term demand.
Geopolitical and supply dynamics continue to shape the market. Russian gas flows remain steady via Sudzha (42.3 mcm) and Velke Kapusany (40.8 mcm), while Nord Stream remains offline. EU storage is 86.65% full, down slightly from 87.39%. Norwegian flows, currently at 327.5 mcm/day, are impacted by maintenance at Heidrun and Visund fields, with further outages planned into December. Meanwhile, oil markets saw limited movement, with Brent at $73/bbl, and carbon prices dipped to €67.63/tonne. The market remains cautious, balancing short-term supply risks against milder weather forecasts and LNG stability.