Energy Market Update - 28 November 2024
UK gas and power prices dropped in Wednesday’s session, influenced by mild weather, increased wind forecasts, and steady LNG supplies, amidst stable geopolitical developments.
UK gas prices declined as the NBP followed the TTF’s lead, with the TTF front month losing €0.42/MWh due to forecasts of warmer temperatures and higher wind generation across Europe. Day-ahead NBP gas settled at 116.40p/therm. Gas demand rose to over 300mcm due to overnight freezing temperatures, but robust LNG flows of 87mcm/day and storage withdrawals helped balance the system, which opened 3mcm short. Ten LNG cargoes are expected in the UK over the next three weeks, adding to Northwest Europe’s supply stability.
In the power market, the UK front-month contract dropped £1.17/MWh to £105.19/MWh. Wind generation forecasts rose by 1.1GW, expected to average 13.7GW in the upcoming week, reducing reliance on gas-fired power generation. Carbon prices remained steady, with EUA Dec 24 trading at €68.47/tonne, while European storage levels held at 87.04%, reflecting high supply security.
Crude oil prices held steady at $72.83/bbl (Brent M+1) following a ceasefire agreement between Lebanon and Israel, easing geopolitical tensions. However, upcoming US holidays and the OPEC+ meeting have subdued market activity. Meanwhile, coal traded at $123.64/tonne (ARA CIF Cal Y+1), showing little change as mild weather reduced heating demand across Europe.
This balance between ample supply, rising renewables, and steady geopolitical conditions points to a stable yet dynamic energy market as winter approaches.