Energy Market Update - 04 March 2024

The market rebounded on Friday, reflecting a mix of volatility and cautious optimism as we enter the final month of winter delivery.

EU gas storage levels, reminiscent of stable summer prices seen in previous years, suggest a potentially less turbulent refill season ahead. The TTF Front Month contract edged up to €25.81, with the NBP Front Month following suit to 64.28p, despite the UK system opening slightly short today due to maintenance at Oseberg and stable Norwegian exports.

Today, UK gas prices showed initial softening before recovering, with the April-24 front month contract closely mirroring Friday’s closing at 64p/th. This fluctuation reflects the current market's complexity, where bearish long-term outlooks clash with short-term bullish factors like limited LNG arrivals and OPEC's continued production cuts. Despite these temporary drivers, the overarching sentiment in European gas markets remains bearish, supported by record high storage levels at 62%.

The incoming two LNG cargoes this week and warmer temperatures forecasted into March suggest a decrease in UK LDZ demand, balancing the immediate supply constraints against the broader market's bearish stance. This scenario underscores the nuanced interplay between supply dynamics, weather forecasts, and geopolitical factors, shaping a market that is cautiously navigating through the remaining winter delivery period.