Energy Market Update - 20 May 2024

An upward end to the week, albeit small rises each day, has pushed the overall trend into a bullish mode for the time being.

A few newly listed LNG cargoes heading towards the UK will be timely as some of the Norwegian fields undergo planned maintenance this week. Otherwise, the outlook remains unchanged.

Friday saw the TTF Front Month contract settle at €30.77 (from €30.25) and the NBP Front Month contract at 74.36p (from 73.03p). No unplanned outages this morning, with flow levels at 317mcm (320). Russian nominations show Velke Kapusany at 40.1mcm (40.6) and Sudzha at 42.2mcm (42.4). Nord Stream remains unavailable. EU gas storage is 66.77% full as per AGSI+. Five LNG vessels are due to arrive in the UK in the next couple of weeks.

This morning we see the Front Month TTF contract at €31, unchanged from the previous settlement. UK gas prices have opened higher, with gains across the curve to start the week. The UK Front Month Baseload contract is at £67 (£66) and the Front Season at £85 (£84). UK power prices show the DA at £75, unchanged from the previous report.

In other markets, Brent Oil is at $84 ($83) and EUAs are at €71 (€70). Henry Hub is at $2.63 ($2.50) and JKM is at $11.05, unchanged. The TTF equivalent is $9.81 ($9.64). The UK system is relatively comfortable this morning despite increased prompt prices, with total demand 73mcm below the seasonal average. Warmer temperatures are keeping LDZ demand at 65.3mcm. CCGT demand is up at 33mcm due to weaker wind generation.

Flows into the UK are down day-on-day and are expected to weaken on Tuesday due to Norwegian maintenance. The largest maintenance, at Kollsnes, will take 158mcm/day offline on Tuesday with a restart on Wednesday. Oil prices gained this morning as political uncertainty arose with the deaths of the Iranian president and foreign minister in a helicopter crash.