Energy Market Update - 09 July 2024

A softer start to the week, as front contracts dipped more than the curve in yesterday's session.

Temperatures are expected to dip before rising again over the coming days. In the US, the energy industry is assessing the impact of Hurricane Beryl after it caused damage throughout the Caribbean and hit the US yesterday.

Yesterday saw the TTF Front Month contract settle at €32.29 (from €33.07) and the NBP Front Month contract at 75.00p (from 77.27p). Visund remains on unplanned outage, with flow levels at 334mcm. EU gas storage is at 79.14% full. One LNG vessel is due to arrive in the UK in the next couple of weeks.

This morning, the UK system opened 11mcm long, with increased wind and solar generation reducing gas demand for power. Norwegian exports to the UK are steady at 82mcm/day. LDZ demand is low, typical for this time of year. Windspeeds are forecast to remain above average until the weekend. One LNG cargo from the US is expected to arrive on 11 July, delivering 106mcm.

Natural gas spot prices continued to edge lower yesterday, pressured by strong Norwegian output. Curve prices fell as concerns around Hurricane Beryl eased. Freeport LNG ramped down production for the hurricane. On the power side, prices declined throughout the curve. JKM prices increased to $12.13/MMBtu due to rising Japanese demand. EU storage levels are higher than this time last year, at 79.14%.

UK NBP prices opened lower this morning as LNG production facilities resumed operations after Hurricane Beryl. The August 2024 front month contract is at 73.80p/th, about 1p/th lower than the previous session. The system is 14mcm long despite increased demand due to low wind generation. Both Norwegian flows and LNG send out remain steady, with EU storages filling at a good rate.

UK power prices echoed the gas market, with lower wind pushing up gas for power demand. Freeport LNG in the US, Europe's largest LNG supplier, has suspended operations until Wednesday due to the hurricane. The US has supplied 24m tonnes of Europe's 52m tonnes of imported LNG so far this year.