Energy Market Update - 17 April 2024

Prices increased across the board yesterday due to reduced output from several Norwegian assets and forecasts of lower-than-normal temperatures over the next few weeks.

The UK Winter gas contract surged, now nearing the £1 mark from just 80p a few weeks ago, highlighting a significant uptick in April's pricing along the curve. The TTF Front Month contract also rose to €33.14 from €31.14, and the NBP Front Month contract increased from 77.50p to 82.85p. Contributing to the tight supply, unplanned outages at Aasta Hansteen and Ormen Lange have further impacted flow levels, which stand at 324 million cubic meters.

Further disruptions include reduced flows from Russia, with nominations at Velke Kapusany dropping slightly. The unavailability of Nord Stream continues, while EU gas storage levels remain stable at 62.02% capacity. In terms of LNG, four vessels are scheduled to arrive in the UK over the next few weeks, indicating a somewhat stable LNG supply outlook.

On the power side, UK Front Month Baseload power contracts rose to £69 from £65, with the Front Season contract also seeing a rise. In other commodities, Brent Oil remains steady at $90, while EUAs increased to €74 from €71, indicating a slight upward pressure in the carbon market. The UK energy system opened just 3 mcm/day oversupplied, with forecasts suggesting a short-term fall in gas for power demand due to increasing wind speeds.