Market Insight

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Tues, 19th Mar ’24


  • With only 12 days of Winter-23 remaining, prices have been on a sustained uptick for the last few days.
  • At the time of writing, near-term delivery (Day/Month/Quarter/Season-Ahead) is up more than 10% versus last Wednesday.
  • The key drivers contributing to this late winter rally are unscheduled Norwegian outages (reducing flows by circa 7.5mcm/day); revised forecasts of lower temperatures across the UK and Europe for the rest of the week; and ongoing weak LNG arrivals to the UK (and the associated low send-out – see chart).
  • So, why are LNG imports dropping off?
  • Well, sendout last week dipped to its lowest level since October 2023 – likely off the back of muted demand and steady pipeline imports.
  • Gas consumption is significantly down versus this time last year (more than 30%).
  • And so, low sendout is likely a reflection of this muted demand, coupled with continuous imports along the UK’s interconnector pipelines since early March — the highest number of consecutive importing days since 2022.
  • Regasification could remain muted over the coming week, as milder temperatures and stronger wind generation continue to weigh on gas demand – as such, only a few LNG carriers have declared for arrival at UK terminals before month-end.
  • Temperatures are expected to return quickly back above seasonal norms in time for the weekend – reducing heating demand and weakening price support.
  • In short, notwithstanding the relatively strong volatility we’ve seen over the past days, the upward move feels unsustainable (considering the persisting weak demand and Europe’s historically high gas stocks).
  • Even the lower temperatures expected in the coming days should be mostly offset by healthy renewables outputs – once again limiting gas withdrawals.
  • Monthly Day-Ahead averages are on target this month to achieve 68p/therm (or 2.3p/kwh).


  • As further evidence of weak demand, monthly UK average power load is printing significant lows versus the last 10 years (see chart).
  • Looking to the continent, near-term delivery prices remain steady in anticipation of rising solar generation and temperatures (offsetting forecasts of slightly weaker wind output and French nuclear generation combined with higher gas/emissions prices).
  • On the carbon markets, prices started the week on a bullish note, lifted by the upward momentum of buoyant gas prices amid tighter supply dynamics and forecasts of temporary colder weather for early next week.
  • Carbon’s rise so far this week is attributable almost entirely to the gas market driving the rest of the energy complex, with higher prices inevitably favoring a higher-emitting coal-based thermal generation.
  • The fundamental picture is however still unsupportive of a sustained bull run and a correction is expected to materialize with the developing onset of summer conditioning.
  • Nonetheless, beware of further gains in carbon prices as numerous short positions of investors are seen above 65 €/t and a rise above that level will of course trigger another round of short-squeezing that will be short lived but spiky!
  • Back in the UK, UKAs are in and around £40/tn – the prevailing range at £45/tn to the topside (and £30/tn to the downside).
  • Today, our electricity generation mix is bullish in nature with renewables contributing 15%, thermal at 51% (gas and coal) and low carbon at 21% (nuclear and imports).
  • Monthly Day-Ahead averages are on target this month to achieve £65/mwh (or 6.5p/kwh).



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