Energy Market Update - 28 June 2024

The energy market is stable with mixed movements; oil prices rose on supply concerns while gas and power saw modest gains amidst stable supply fundamentals.

Crude oil prices increased, settling at $86.39/bbl for Brent M+1. Geopolitical tensions in the Middle East and Europe, coupled with a weaker US dollar, drove the bullish sentiment. However, a surprise increase in US crude and gasoline inventories limited the price rise.

European gas prices saw an uptick due to high Asian LNG demand despite Chevron's Wheatstone LNG plant restarting. NBP DA gas settled at 79.70 p/therm. The UK gas system opened 15 mcm/day oversupplied this morning, supported by robust flows from Norway and strong storage injections.

UK power prices were mixed; the UK DA Base settled at £37.95/MWh, driven by healthy wind generation and reduced demand. July contracts saw minor gains, closing at £73/MWh for the Front Month Baseload. An unplanned capacity reduction on the IFA1 interconnector has been extended, influencing market dynamics.

Overall, the market remains rangebound with stable supply fundamentals. Key contracts such as TTF Front Month and NBP Front Month closed at €35 and 82p respectively. EU gas storage is at 76.20% full, ensuring supply security as the market transitions into July.