Energy Market Update - 02 April 2024

The energy market anticipates a period of stability, with warmer weather ahead offsetting the impact of reduced LNG arrivals due to Freeport LNG's continued partial outage.

This warming trend, expected to bring temperatures to seasonal norms towards the end of April and into May, comes as the market adjusts to a lower volume of LNG arrivals. This is a result of ongoing disruptions at Freeport LNG, affecting its output but not halting it entirely. Last Thursday, market contracts saw slight decreases, with the TTF Front Month contract closing at €27.34, down from €27.76, and the NBP Front Month at 68.05p, down from 69.56p.

Operational status remains stable with no unplanned outages reported this morning. Gas flow levels are maintaining with slight adjustments in Russian nominations. The EU gas storage levels are moderately high at 58.72%, ensuring a comfortable supply margin. The UK expects two LNG vessels in the next couple of weeks, which, alongside the long UK system due to rising temperatures, suggests a balanced supply outlook despite constrained LNG supplies.

Price movements in key contracts indicate cautious market sentiment. The TTF and NBP front month contracts show minor adjustments, reflecting the market's reaction to the current supply-demand dynamics. The UK's power prices have seen some fluctuations, with the UK Front Month Baseload contract adjusting to £59 from £62. This comes as the market navigates through a mix of factors including temperature forecasts, LNG arrivals, and the broader energy context marked by oil and gas prices.

Overall, the market is navigating through a complex landscape of supply challenges, weather conditions, and energy demand dynamics. The outlook remains cautiously optimistic as the industry balances short-term disruptions with the anticipation of normalising weather patterns and steady supply flows.