Energy Market Update - 10 December 2024
Energy markets opened lower today, reflecting bearish momentum driven by milder weather forecasts, steady LNG supplies, and robust Norwegian gas flows easing supply concerns.
European natural gas spot prices saw declines, with the UK NBP spot falling to 111.45 p/therm and TTF to €45/MWh. Warmer-than-average temperatures and improved LNG send-outs, with terminals delivering 99 mcm/day in the UK, supported this downward trend. Norwegian flows remained strong, despite an unplanned outage at the Asgard field, which curtailed 7.3 mcm/day. EU gas storage sits at 82.05% capacity, but the UK’s lower storage levels—below 60%—highlight risks from colder winter periods ahead. However, the resumption of LNG arrivals after storm delays has mitigated immediate concerns.
Power markets largely mirrored the gas price trends. UK day-ahead baseload power rose to £112.41/MWh, reflecting a tight market caused by low wind generation this week, 20% below seasonal norms. Reduced interconnector capacity, including outages on the BritNed and ElecLink links, has added upward pressure. However, wind generation forecasts for next week show a sharp increase, which could balance demand. Solar generation remains stable across Europe, while nuclear capacity is set to improve with the return of three UK reactors this week, adding 2.3 GW.
Geopolitical and macroeconomic factors also influenced market sentiment. Oil prices rose to $72/bbl as China is expected to announce stimulus measures to boost demand. Meanwhile, European coal prices remained stable at $113.70/tonne, and carbon allowances softened slightly to €66.37/tonne. The JKM-TTF price spread continues to be closely monitored, as Asian LNG demand weakens, potentially increasing shipments to Europe.
In conclusion, today’s energy markets reflect short-term bearishness tempered by structural supply security and evolving weather conditions. LNG arrivals and storage utilisation will remain key focal points for traders as winter progresses.