Energy Market Update - 23 May 2024

UK Power made gains on Thursday with the front month trading at £2.47/MWh higher. The UK carbon market ended the day flat.

European Gas benchmarks rose on Wednesday as the Dutch TTF was buoyed by a positive correlation with European carbon, lifting the UK NBP. Norwegian maintenance and increased Chinese LNG demand influenced prices. Despite supply concerns, EU storage is 67% full, 2% higher than last year.

The market saw mixed movements, with Gassco flows returning post-maintenance and spot contracts rising. Austrian OMV warned of potential Russian gas supply cessation, affecting bullish sentiment on the curve. UK power prices fell on spot contracts but saw lifts on the curve.

Today's session opened with the UK system undersupplied by 19 mcm/day due to lower Norwegian flows. Gas for power demand is strong, expected to rise with weaker winds, while temperatures are forecasted to remain above seasonal norms. Four LNG cargos are inbound to the UK, with more to North West Europe. Pan-European storage stands at 67.53%.