Energy Market Update - 07 March 2024

NBP prices rose slightly today amid declining demand and stable European storage, despite a lack of LNG imports driving recent price increases.

In today's market, the Apr-24 NBP front month contract has seen a modest increase to 67p/th, up by approximately 1p/th from yesterday's close. This rise occurs against a backdrop of decreasing demand, thanks to improved weather conditions boosting temperatures and wind generation, alongside a persistent lack of significant cold weather forecasts for the remainder of Q1 2024. Despite the lower than seasonal demand and European gas storage levels showing strong at 62% full, the scant arrival of LNG to the UK has contributed to the upward pressure on prices.

Recent geopolitical tensions in the Red Sea have captured market attention, though it's believed energy cargoes have already avoided the area. Yesterday's market session ended lower, reflecting a period of adjustment as the market seeks a new stability point. This adjustment was influenced by a variety of factors, including weather conditions and geopolitical events, highlighting the market's sensitivity to external influences.

Contract prices have adjusted accordingly this morning, with notable shifts in the TTF and NBP front month contracts. This reflects the market's reaction to the current supply-demand balance and external geopolitical concerns. With a cautious outlook, commercial clients should closely monitor these developments for potential implications on future contract decisions, especially given the limited LNG arrivals and stable European storage levels providing a nuanced supply landscape.