Energy Market Update - 19 April 2024

Energy markets showed an upward trend in yesterday's session, influenced by geopolitical developments and supply disruptions.

In recent developments, the ongoing situation with Nord Stream AG has intensified as insurers denied coverage for damage caused by acts of war, impacting the financial stability of the pipeline operation. This news coincides with a slight increase in the TTF Front Month contract, which closed at €32.31, up from €31.29, and the NBP Front Month contract at 81.21p, rising from 78.15p. Additionally, the unplanned outage at Ormen Lange and steady flows from Russia keep the supply dynamics tense, while EU gas storage levels remain stable at 62.06% full.

The UK energy sector saw some movements with the TTF Front Month contract opening at €33 today, a notable increase. Other contracts such as the UK Gas NBP spot and the UK Power Day-Ahead also reflected upward adjustments. Power prices are notably influenced by the UK's pricing structure, with the Front Month Baseload contract at £68, slightly up from £66.

Market attention is also drawn to broader energy commodities with oil prices remaining robust despite geopolitical tensions. Brent Oil held steady at $87, while Henry Hub and JKM reported slight increases, indicating a sustained demand for energy resources. The dynamics are further complicated by the recent global events affecting oil markets, with futures momentarily peaking following escalations in Iran.