Energy Market Update - 12 March 2024

The week starts on a bearish note following erratic sessions last week, with a positive shift in weather forecasts influencing the market.

The energy market kicked off the week with a downturn, marking a contrast to last week's fluctuating sessions. The long-term weather outlook presents a more optimistic scenario, with temperatures anticipated to remain above seasonal norms until late March, aligning closely with seasonal averages through April. This shift contributed to a significant drop in the TTF Front Month and NBP Front Month contract settlements from the previous values.

Today's operations report no unplanned outages, showing a decrease in gas flow levels compared to the previous session. Despite stable Russian nominations and ongoing unavailability of Nord Stream, the EU gas storage levels slightly declined, with the UK and EU maintaining robust storage capacities. The market anticipates the arrival of two LNG cargoes in the forthcoming weeks, indicating a steady supply landscape.

Contract prices this morning remain unchanged for the TTF Front Month, with a slight recalibration in other key contracts reflecting a cautious market response to the evolving weather and demand dynamics. The UK's power and gas sectors show adjustments in spot and contract prices, amidst stable oil and a drop in EUA prices. The energy market's current posture, influenced by near-record EU storage levels and the UK system's shift to a surplus, underscores a scenario of balanced supply despite potential demand shifts due to weather changes.