Energy Market Update - 11 March 2024

The UK energy system opens short today amidst reduced continental exports and an unplanned Nyhamna plant outage, against a backdrop of increasing winds and slight temperature adjustments.

The UK energy market faces a short opening this morning, with piped gas exports to the continent diminished due to ongoing maintenance and a significant, unplanned outage at the Nyhamna processing plant curtailing supply by about 25mcm/day. This situation is compounded by forecasts predicting an upturn in wind speeds from 12th March, expected to remain higher than seasonal norms for the forthcoming week.

Meanwhile, temperature projections have been revised upwards for the next week, aligning closer to seasonal normal temperatures for the remainder of the forecast period. LNG supply outlook is bolstered with two cargoes anticipated by month-end, amidst a robust influx into North-West Europe.

After a week of volatile movements, Friday's market session concluded on a relatively stable note, notwithstanding the immediate impact of the Nyhamna outage. The overall market outlook is tempered by expectations of warmer than usual temperatures this week. Contract settlements on Friday indicated a modest increase, with the TTF Front Month and NBP Front Month contracts closing higher than their last positions.

This morning's contract pricing reveals no change for the TTF Front Month, amidst slight alterations in other key contracts, reflecting a market equilibrium seeking to adapt to the immediate supply challenges and weather-induced demand fluctuations. The market remains watchful of the short-term impacts of the Nyhamna outage, even as it navigates the broader context of temperature trends and LNG supply dynamics.