UK Gas & Power: Shifting Norwegian Supply Picture Keeps European Energy on the Move

VP Trading, Fanos Shiamishis, reports on energy market activity, covering the period 4th June – 11th June 2024. On our end-of-day pricing tool, The Source, we published an in-week high of £90.11/MWh for the Winter-24 seasonal power price on 4th June. In this blog, Fanos shares the market news and updates from the last week. 

Tuesday saw prices decline across energy products. The UK gas system was oversupplied in the morning as the Norwegian Nyhamna outage was expected to last less time than initially expected, helping ease gas prices. LNG supply remained strong with the Gorgon, Cameron and Freeport export facilities operating at full capacity. Q3-24 was the most traded UK power contract with 546MW changing hands.

On Wednesday, the front-month gas contract fell back after Gassco released an update stating the Nyhamna plant would ramp up to 35mcm/day by Friday following a four-day outage. With Nyhamna the only supply concern, European supply fundamentals looked comfortable overall. N2EX day-ahead cleared £16/MWh higher due to forecasts for sharply lower wind generation early Thursday.

Trading was sideways on Thursday as the UK gas system showed an oversupply position in the morning. Norwegian flows were lower but expected to increase Friday. UK power trading focused on July and August contracts, followed by Winter 2024 including some Q4 2024 and Q1 2025 volume.

Norwegian flows into the UK via Langeled resumed Friday following repairs which had kept them offline since June 2nd. Mixed signals emerged, with power prices down day-on-day amid scarce trading and minimal volumes clearing. Gas prices saw small gains in the front months for NBP and TTF while the front season contract softened.

European gas markets recovered on Monday despite no clear fundamental drivers behind the rally. N2EX day-ahead closed flat as forecasts for low wind generation Tuesday were countered by a firmer NBP market. UK power curve contracts edged slightly higher though gains were capped by losses in carbon markets.