Energy Market Update - 05 June 2024

The energy market stabilised on Tuesday following the recent surge, with relief from improved supply outlooks and weather conditions.

Oil prices declined, hitting their lowest since February. OPEC’s announcement of phased cuts ending by Q3 2025 raised concerns about a potential oversupply. Brent oil closed at $78, unchanged from the previous day.

European gas markets reversed Monday's gains after Gassco's update on the Sleipner riser platform. The repair is expected to be completed soon, reducing long-term concerns. TTF Front Month settled at €33.80, down from €36.01, and NBP Front Month at 80.59p, down from 87.12p. EU gas storage is at 70.62%.

UK power prices fell, influenced by the gas market. The NBP spot price dropped to 82p from 89p. Renewable generation forecasts are positive, with solar and wind output expected to exceed seasonal norms. The UK Front Month Baseload contract closed at £75, down from £80, while the Front Season contract is at £91, down from £94.

Overall, the market remains cautious but stable, with LNG arrivals and renewable output providing supply security amidst ongoing maintenance and outage resolutions.