Energy Market Update - 27 June 2024

The energy market experienced a downturn as bearish sentiment took hold amid steady fundamentals and oversupply concerns.

Spot prices for European natural gas, including the UK's NBP, fell due to high supply from Norway. This drop, combined with steady storage levels at 75.95% in the EU, slightly lower than last year, has influenced market dynamics. The JKM saw an uptick due to heatwave-driven demand in Asia, impacting the curve. The UK power market mirrored the gas trend, with prices declining following gas movements.

Today's session began with the UK system oversupplied by 13 mcm/day, attributed to reduced demand from both LDZ and power generation. Maintenance at the Easington terminal and the Langeled pipeline, starting tomorrow, will temporarily reduce capacity, while MRS and Rough continue strong injections. Exports to the continent increased, and a single LNG cargo is expected at UK shores. Prices for the NBP front month July-24 contract rose to around 80.50 p/therm.

In other news, Slovakia's legal protection of SPP from payment seizures to Russia mitigates market fears of supply disruptions similar to those experienced by Austria's OMV. The TTF front month contract settled at €33.82, with no change in this morning's trading. Brent oil is stable at $85.25/bbl, coal at $117.30/tonne, and carbon at €66.93/tonne. The UK front month baseload power contract stands at £72/MWh.

Overall, the market reflects cautious stability amid steady supply and minor price fluctuations. Warmer weather and maintenance schedules are key factors influencing short-term market movements.