Energy Market Update - 03 April 2024

Yesterday saw a bearish start to April, with energy prices declining across the board.

EU gas storage is preparing for winter with 59% capacity already stored, aiming for 90% by November. This compares to last year's starting point of 56%, reaching the target by mid-August. The TTF and NBP Front Month contracts saw decreases to €26.20 and 64.68p, respectively. EU gas storage levels are at 58.71%, and the UK anticipates two LNG vessel arrivals in the next few weeks.

There's no change in the TTF Front Month contract this morning, holding at €26. Other key contracts show slight adjustments, with the UK's gas and power prices also reflecting a downtrend. The UK system is 17 mcm/day long, influenced by lower-than-average gas demand and the return of the Heysham 1-2 nuclear unit, offset by the upcoming Torness 1 outage.

Brent Oil and EUAs saw increases to $89 and €59, respectively, while Henry Hub and JKM moved to $1.86 and $9.47. The upcoming mild weather and above-seasonal temperatures add a bearish tone to the market, despite stable Norwegian flows and unchanged UKCS receipts. The global LNG market remains tight, with the UK expecting two cargoes by the end of April amid suspended operations at Russia's Arctic LNG 2 project due to sanctions.