Energy Market Update - 20 June 2024

The UK gas market has opened slightly higher this morning due to increased demand driven by lower wind generation.

In the UK, total gas demand has increased by approximately 14 million cubic meters (mcm) day on day, with wind speeds falling more than 2 m/s below seasonal norms. The UK system, which had been significantly long in recent days, has now reduced to just 4 mcm, with total demand at 147 mcm, still 55 mcm below seasonal normal. The unplanned Norwegian outage at Visund continues, limiting capacity by 15 mcm. Meanwhile, temperatures across Europe remain warm, with the UK expected to see temperatures peak at 5 degrees above seasonal normal by midweek. LNG deliveries into Europe remain low, with only one cargo expected to arrive in the UK next week.

Concerns persist around gas flows out of Russia due to disputes involving Gazprom Export. OMV recently reported expected cessation of flows over payment disputes, and with today being the 20th, the majority of payments are due, potentially affecting gas contracts. Furthermore, Russian courts have blocked ENGIE and Innogy Engie from taking their case to international courts, adding to market uncertainties. Overnight, there were reports of further attacks on Ukrainian energy infrastructure by Russia.

Yesterday, the TTF Front Month contract settled at €35.34 (from €34.70) and the NBP Front Month contract at 82.86p (from 81.44p). The Visund outage remains, with flows at 328 mcm (up from 325 mcm). Russian nominations show Velke Kapusany at 43.0 mcm and Sudzha at 42.4 mcm. EU gas storage stands at 74.09% full according to AGSI+.

This morning, the TTF Front Month contract is unchanged at €35, with the NBP Front Month at 83p (up from 81p). UK gas spot prices remain at 82p. UK power prices are steady, with the Front Month Baseload contract at £74 and the Front Season at £90. Brent Oil remains at $85, EUAs at €70, Henry Hub at $2.91, and JKM at $12.60.