Energy Market Update - 12 April 2024

An uptick in wholesale natural gas prices marked yesterday’s session, driven by geopolitical tensions and legislative changes, highlighted by attacks on Ukraine's energy infrastructure and the European Parliament's ban on Russian LNG.

The TTF Front Month contract surged to €29.38 from €27.10, while the NBP Front Month climbed to 73.69p from 67.37p, reflecting market nervousness. Notably, EU gas storage levels remain stable at 61%, with no unplanned outages reported. Russian gas nominations increased slightly, indicating a minor uptick in supply despite geopolitical strains.

In the UK, gas and power prices have responded variably. The Front Month TTF contract saw no change this morning, maintaining its position at €29. Meanwhile, the NBP and UK Power contracts indicated rising prices with the NBP Front Month reaching 74p and the UK Front Month Baseload power contract at £63, up from £58. These shifts suggest cautious trading amidst ongoing geopolitical concerns.

The broader energy market shows mixed signals. Brent Oil holds steady at $90, while EUAs increased to €68 from €63, indicating a shift towards more costly emissions. Henry Hub prices dipped to $1.76 from $1.89, contrasting with a slight rise in JKM prices. This complex landscape presents a challenging scenario for market participants as they navigate through geopolitical risks and legislative changes affecting energy supply and pricing.