Energy Market Update - 18 June 2024

A bearish start to the week as the concerns of last week pass without further repeat.

Warmer weather is on the horizon, reducing demand as the unplanned outage in Norway continues. The UK system is currently 12mcm long, with total demand at 136mcm, 66mcm below seasonal normal. Exports to the continent have decreased, adding bearish pressure to the market.

Yesterday saw the NBP Front Month contract settle at 80.52p (from 83.29p) and the UK Front Month Baseload contract at £74 (from £75). EU gas storage is at 73.41%, with only one LNG vessel due to arrive in the UK over the next couple of weeks.

Wind forecasts are below seasonal normal for the rest of June, increasing gas demand for power generation. As temperatures improve next week, peaking at 4 degrees above seasonal normal, the market remains cautiously optimistic.