Market Insight

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Fri, 1st Mar ’24


  • Looking down the curve, Seasonal Forwards are up on the week but down on the month (see chart).
  • To end the week, prices are little changed versus yesterday’s close.
  • The UK system was short at this morning’s open (demand outstripping supply) against a backdrop of higher heating demand and reduced LNG send-out.
  • Depending on which weather report you believe, there’s a colder weekend in the offing – but temperatures are expected to be back above seasonal norms once Monday rolls around.
  • On the supply side, an unscheduled outage at Norway’s Troll Field is lending support to near-term delivery contracts.
  • Notably, and for the first time since 2021, China’s LNG imports increased by circa.15% to hit a record high in February (raising jitters about increased global competition for LNG cargoes).
  • All in all, it’s been a week of muted volatility and sideways price action, with markets having found relative equilibrium.
  • With only 30 days to go until the onset of Summer-24, surely only geo-political unrest poses any risk to a continuation of the prevailing long-term bear trend.
  • European storage looks set to finish the winter with more than 50% left in the tank – currently at 63% versus 5-year average of 43%.
  • Monthly Day-Ahead averages for February ended up at 64p/therm (or circa. 2.2p/kwh).


  • Down the curve, Seasonal Forwards are up on the week but down on the month (see chart).
  • Looking to the continent, European near-term delivery prices look set to finish the week marginally higher – supported primarily by anticipation of weaker renewables outputs and lower temperatures.
  • Expect more of the same into the early part of next week.
  • Far-term delivery contracts are relatively directionless.
  • All in all, the prevailing (and unchanged) bearish fundamental outlook is keeping a lid an any meaningful upside.
  • On the European/UK carbon markets, it’s the same story, tight rangebound trading, low volatility.
  • The upcoming COT (Commitment of Traders report) will be released on 6th March and should shed light on the extent to which the recent rebound was fueled by short-covering (reducing sell exposure) and strategic purchasing from compliance players (Industrials) capitalizing on what feels like a market bottom.
  • Regardless, anticipation of higher supply and lower demand year-on-year during 2024 is likely to limit any meaningful upside in emissions prices for the foreseeable future.
  • Back in the UK, our electricity generation mix is bearish in nature with renewables contributing 41% and gas-for-power burn at 26%.
  • Monthly Day-Ahead averages for February ended up at £59/mwh (or 5.9p/kwh).



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