Market Insight

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Wed, 12th Jun ’24


  • The front winters (’24/’25) are back up testing 100p/therm again following last week’s short-lived drop off to 96.57p/therm.
  • The UK system was long at this morning’s open (supply outstripping demand forecast) with a little more Norwegian flow coming back online.
  • LNG stocks remain healthy despite very few arrivals to UK ports this month – sendout remains stable at 8mcm/d (million cubic metres/day).
  • The Wheatstone LNG platform in Australia is undergoing unscheduled maintenance meaning LNG buyers are likley to see increased competition for cargos.
  • Australia supplies a good chunk of its LNG output to Asia where high temperatures have increased cooling demand – so Asia will need to compete for cargos which otherwise would be headed for Europe/UK shores.
  • On the weather side, forecasts are mixed so expect some flip-flopping – though it’s likely we’ll not see temperatures back up above seasonal norms until the 20th.
  • Wind generation has dropped off a cliff but will be back up again by the weekend, then forecast to plateau at moderate levels for the remainder of the month.
  • European storage is at 72% versus the 5-year average of 59%.
  • Global LNG production is forecast to rise 4% to coincide with the onset of Winter-24 – it’s conceivable if we have another mild winter that increased export capacity may lead to an oversupplied market next summer.
  • As we head deeper into summer conditioning, demand is on a downwards trend from here-on-in and will gradually loosen the UK balance – allowing storage injections.
  • Whilst it’s conceivable we’ve already seen the bottom of summer pricing, it’s not panic stations just yet.
  • The consensus amongst Industrials continues to be one of scaling-in whilst adopting a wait-and-see approach to any remaining open volumes for Winter-24/winter-25.
  • 111 days of Summer-24 remain (with 73 days now used up) – so we’ve got the best part of two thirds of Summer-24 still to come.
  • Europe remains on track to achieve 100% storage levels by Winter-24 (early Oct ’24).
  • Monthly Day-Ahead averages are on target this month to achieve 82p/therm (or circa. 2.8p/kwh excluding non-gas).


  • Looking to the continent, European near-term delivery prices cleared with mixed results yesterday – down in France (on anticipation of rising nuclear availability) but up in Germany, Belgium and the Netherlands (at the prospect of falling wind ouputs).
  • On the Carbon markets, EUAs (European Allowances) observed a noticeable decline in the afternoon, heading back toward the 70€/tonne level.
  • Market participants attribute the recent erratic moves of emissions to a combination of gas developments and technical trading (ahead of the June options expiry).
  • EUAs have seen bearish momentum over the past couple of weeks, and further weakness in the gas market will likely bring about a more sustained downward move.
  • The COT (Commitment of Traders Report) released today shows an increase in speculators’ net short position highlighting their appetite to renew a bearish bet on the market.
  • Back in the UK, UKAs (UK Allowances) are treading water – now trading at circa. £49/tn (Dec-24 benchmark) – having failed to break above the upper extremity of the confirmed price channel, with momentum indicators in overbought territory and rolling over (see chart).
  • Our electricity generation mix is bullish in nature today with renewables contributing 16%, thermal at 43% (gas and coal) and low carbon at 27% (nuclear and imports).
  • Monthly Day-Ahead averages are on target this month to achieve £67/mwh (or 6.7p/kwh excluding non-energy).



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