Energy Market Update - 05 March 2024

The UK energy market faced challenges today, starting short due to reduced export nominations and lower UK LNG send-out, compounded by an unplanned outage at Kårstø affecting 10.5mcm/day of flow.

Despite these supply constraints, France's nuclear output has shown resilience, increasing by 7% despite maintenance shutdowns. The anticipation of two LNG cargoes arriving within the next five days offers some relief to the tight supply situation.

Market volatility was highlighted yesterday with a sharp reaction to geopolitical tensions in the Red Sea, demonstrating the market's sensitivity to global events that threaten energy delivery. The TTF Front Month contract experienced a rise to €26.89, with the NBP Front Month contract also increasing to 67.36p, indicating a reactive market amidst ongoing uncertainties.

Today's energy landscape shows a steady situation with no change in the TTF Front Month contract at €27, amidst a backdrop of slight adjustments in key contracts and a cautious outlook on supply levels, with EU gas storage at 62.10%. The market's response to the unplanned outage and geopolitical events underscores the fragile balance between supply availability and external disruptions, with the energy sector closely monitoring incoming LNG shipments and international developments.