Market Insight

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Fri, 17th May ’24


  • Looking specifically at Winter-24/Winter-25 delivery (currently the highest priced seasons down the curve), delivery prices fell below historical support levels in Dec ’23 and dropped off throughout Q124 (see chart).
  • Winter-24/Winter-25 prices then established a market bottom/support in late Feb, and have been on a shallow rise to date – though markets are currently below the recent highs printed mid-Apr’24.
  • As such, market participants are watching closely as summer conditions deepen to see if prices will retest the Feb’24 lows or if prices will remain rangebound throughout Summer-24.
  • 137 days of Summer-24 remain – historically, June is the month which marks the “bottom” of summer value – so watch this space.
  • Lower activity at US LNG facility freeport, possibly due to a massive storm in the region, has buoyed the energy complex this morning – though prices are meandering back down at the time of writing.
  • European LNG imports have now fallen below the 30-day moving average – though of course, MRS (European gas storage) is 66% full verus the 5-year average of 47% – easing the supply/demand dynamic across Europe/UK.
  • Notably, China’s gas production has risen 5% so far this year with some analysts predicting a break of 2023’s record for LNG imports (fuelling higher prices due to global competition for cargoes).
  • Norway’s scheduled summer maintenance will take significant volumes offline beginning 21st May – no doubt providing additional price support.
  • Off the back of a drone strike on another Russian oil refinery today, concerns abound over security of underwater pipelines  – with intelligence suggesting that energy infrastructure beyond Russia and Ukraine’s borders is very much at risk of sabotage.
  • Back in the UK, we’re expecting 3 LNG arrivals before month-end with Asian buyers thanksfully putting the brakes on.
  • Unscheduled maintenance at the UK’s South Hook LNG terminal yesterday resulted in a 6-hour shutdown which added to supply jitters –  though the problems have been resolved and LNG sendout going forward is not expected to be impacted.
  • In short, it’s as you were – rangebound price-action – it would be fair to liken the markets to a windless ocean (flat for now, but the winds will inevitably return!)
  • Markets remain at equilibrium with geopolitical support at odds with seasonal pressure (falling demand/solid supply/less reliance on withdrawals etc).
  • Monthly Day-Ahead averages are on target this month to achieve 72p/therm (or circa. 2.45p/kwh excluding non-gas).


  • Seasonal Forwards down the curve are pretty much unchanged versus 1-month ago – but significantly up versus 3-months-ago (see chart).
  • Looking to the continent, near-term delivery prices found support yesterday on forecasts of falling solar generation.
  • On the carbon markets, prices posted noticeable gains yesterday attributed mainly to firmer gas prices amid prospects of  lower renewable outputs and scheduled Norwegian maintenance.
  • The EUA (European Carbon Allowances or EU-ETS) Dec’24 benchmark has already climbed this morning – likely headed to test its 200-day moving average if gas prices remain firm.
  • Back in the UK, UKAs (UK Allowances) are trading at £39.9/tn (Dec-24 benchmark) – having broken above the highs printed on 25th Mar ’24.
  • Our electricity generation mix is neutral in nature today with renewables contributing 30%, thermal at 30% (gas and coal) and low carbon at 26% (nuclear and imports).
  • Monthly Day-Ahead averages are on target this month to achieve £70/mwh (or 7p/kwh excluding non-energy).



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