Energy Market Update - 20 March 2024

The UK market opened long today with suppressed local distribution zone (LDZ) demand due to temperatures being above seasonal normal temperatures. This trend is anticipated to shift with an expected rise in LDZ demand as temperatures approach seasonal normal temperatures from 23 to 30 March. Yesterday's session closed flat, continuing a trend of stability amidst varied market dynamics.

UK continental shelf (UKCS) gas receipts increased, alongside a boost in Norwegian gas flows to the UK. Exit nominations rose to 332 mcm/day, with four LNG cargoes en route to the UK, indicating a robust supply outlook despite increased LNG demand from the Far East. Additionally, the TTF Front Month contract edged up slightly to €28.87, reflecting a cautiously optimistic market sentiment.

The market remains balanced with no unplanned outages and steady Russian gas nominations. EU gas storage levels are at 59.53%, ensuring a comfortable supply margin. The arrival of LNG cargoes in the forthcoming weeks, alongside a stable import framework, underpins the market's resilience despite geopolitical tensions highlighted by recent attacks in the Red Sea.

Forward contracts and spot prices indicate a steady market, with the TTF Front Month contract holding at €29. UK power prices remain stable, and the broader energy commodities market, including Brent Oil and EUAs, shows no significant changes. This stability amidst geopolitical tensions and varying demand forecasts suggests a market attuned to navigating short-term fluctuations with ample supply reserves.