Energy Market Update - 25 March 2024

The energy market ended the week on a bullish note due to attacks on Ukrainian energy infrastructure and subsequent electricity imports. Tensions in Moscow further contribute to market sensitivity.

In the UK, high wind generation led to unusually low weekend electricity prices, with an average of £11/MWh on Saturday. Conversely, the TTF and NBP Front Month contracts saw increases, closing at €27.78 and 71.74p respectively on Friday, indicative of the market's reactive nature to geopolitical tensions and supply disruptions. Notably, there were no unplanned outages, with gas flows and storage levels remaining stable despite the disruptions.

EU gas storage is 59.17% full, with four LNG vessels expected in the UK shortly. This morning, the TTF Front Month contract remained unchanged at €28, illustrating a stabilising market amidst ongoing challenges. UK power prices also saw changes, with the Front Month Baseload contract at £63, reflecting the dynamic nature of energy pricing influenced by supply and demand factors.

Market indicators such as Brent Oil, EUAs, Henry Hub, and JKM show slight fluctuations, underlying the interconnectedness of global energy markets. Despite increased demand, the UK system is oversupplied, thanks to robust Norwegian nominations and strategic LNG sendouts. The outlook suggests mixed temperatures, with potential for strong wind supply contributing to energy security and market equilibrium as we transition into spring.