Energy Market Update - 26 February 2024

The UK energy system is currently strained due to colder than average temperatures and low wind generation, leading to increased reliance on gas for heating and power.

This has temporarily boosted demand, with the UK supplementing its needs by withdrawing 60mcm of gas from storage and maintaining high LNG inflow. Despite these challenges, the situation is expected to improve with a warmer forecast for March.

Market trends reflect a minor decline as the winter period concludes, with ample storage levels and an upcoming mild weather outlook. Trading figures show a dip in energy contracts, amidst stable supply expectations with four LNG cargoes heading to the UK.

Oil prices have fallen due to projections of sustained interest rates in the US, impacting the economic outlook. This financial landscape coincides with the energy sector's focus on the recent Ofgem Price Cap announcement, indicating significant market and regulatory attention as the industry moves forward.