Energy Market Update - 04 June 2024

Natural gas prices surged yesterday due to an unplanned outage at the Nyhamna processing plant, affecting 78.9mcm/day.

The market experienced significant price increases with the NBP July contract reaching 94p/therm before settling lower. The JKM benchmark rose to $12.86/MMBtu, up 3.7% as demand increased. Pan-European storage levels hit 70.17%, reflecting continued healthy injections. On the power side, prices firmed, influenced by the gas market's bullish sentiment.

Today, the UK system has opened 11mcm/day long despite decreased Norwegian exports due to outages at Nyhamna and Troll. UK LDZ demand is expected to rise with cooler temperatures, while wind speeds remain above seasonal norms. The UK anticipates an LNG cargo arrival at South Hook terminal today. French nuclear output in May averaged 37.2GW, 2GW above forecasted levels, stabilising supply.

The NBP market saw strong intraday moves, with the Front Month July-24 contract peaking at 90p/therm before closing at 87.5p/therm. Brent oil prices continued to decline, trading at $77.30/barrel post-OPEC meeting. TTF Front Month settled at €36.01, while EU gas storage remains at 70.49% capacity. Despite the restricted flows, the UK system is long as demand forecasts drop below 100mcm.