Energy Market Update - 08 May 2024

Oil prices dipped slightly on Tuesday as attention turned to upcoming U.S. stockpile data, with the EIA's revised forecasts indicating a well-supplied market. Economic concerns in the U.S. have dampened demand expectations, potentially delaying interest rate cuts.

European gas prices saw a marginal decline, influenced by TTF's pullback from a recent high and constrained by Norwegian maintenance delays and robust Asian LNG demand. The European market remains bearish with 64% storage full and UK wind output low at 3.9GW. UK power mirrored these trends, with the Front Month power up by £1.53/MWh due to lower demand and ample supply.

The UK gas system opened with a surplus, influenced by above-seasonal temperatures and reduced consumption forecasts. With weak wind speeds expected to increase, gas burn and imports may adjust. Storage levels are at 39.22% in the UK, slightly below 2020 levels. Geopolitical risks, notably in Israel, continue to influence market sentiment.

In pricing, the TTF Front Month settled at €31.07, while the NBP Front Month reached 75.86p. No unplanned outages were reported, and LNG arrivals are expected to increase in the coming weeks. Brent oil remained stable at $83, with EU allowances at €71 and Henry Hub at $2.21.