Energy Market Update - 19 November 2024
Energy markets showed mixed movements today, with colder weather driving demand, while increased LNG deliveries and steady gas flows provide supply reassurance.
Natural gas prices in the UK fell slightly, with the December NBP Front Month contract trading at 117.75p/therm. Despite colder-than-average temperatures increasing demand, a long UK system supported prices, alongside consistent Norwegian flows at 111mcm/day and healthy LNG send-outs of 76mcm/day. Eight LNG cargoes are scheduled to arrive in the UK over the next two weeks, with two arriving today. Meanwhile, European gas storage is 90.74% full, slightly down from the previous day, as withdrawals continue during this cold spell.
In power markets, the UK Day-Ahead Baseload price was £101.83/MWh, down from the previous session, reflecting reduced demand amid fluctuating wind output. UK generation remains constrained by an unplanned outage at the Heysham nuclear plant, which will last 28 days, limiting total output to 4.1GW. Reduced interconnector capacity with France has also tightened supply, with IFA1 and ElecLink running below full capacity due to construction works and extended outages.
Geopolitical factors remain a significant influence, with tensions escalating after the US lifted its ban on Ukraine’s use of American weaponry within Russian territory. Market participants are closely monitoring potential developments that could add risk premiums, especially as Europe approaches winter. Meanwhile, global oil prices were steady, with Brent crude trading at $73.30/bbl, reflecting a balance between supply stability and potential demand growth.