Energy Market Update - 06 March 2024

The UK energy market faces a slight shortfall, influenced by maintenance and temperature forecasts, with mixed signals on gas and power prices.

In the UK, maintenance at Oseberg affects gas supply, while LNG send-outs increase and the UK anticipates milder temperatures. These conditions suggest a softer demand for Local Distribution Zone (LDZ) gas. The market reacted to these dynamics with modest price adjustments in gas and power contracts. LNG cargo arrivals and storage levels remain pivotal, indicating a cautious market sentiment.

Recent sessions observed a rebound from February's lows, with price shifts in key contracts reflecting subtle market optimism amid fluctuating supply and demand factors. Despite stable Russian gas flows and no unplanned outages, the energy sector watches closely for changes in LNG arrivals and EU gas storage levels, which could influence market trends.

The market demonstrates resilience, balancing bearish fundamentals against bullish price trends, notably in the NBP market. A focus on LNG availability and weather-related demand shifts underpins short-term strategies.