Weekly Market Update - Ongoing Australian industrial action continues to impact prices

Sales Trader, Yulia Zhizhaeva, reports on energy market activity, covering the period 15th – 21st August 2023. On our end-of-day pricing tool, The Source, we published an in-week high of £144.00/MWh for the Winter-23 seasonal power price on 18th August. In this blog, Yulia shares the market news and updates from the last week.

Early last week, we saw gas prices rise as the probability of Australian LNG strikes increased, with little progress made to resolve the situation. September-23 contracts were trading below the past week’s high, but Winter-23 NBP traded 5ppth higher. Meanwhile, on the UK power curve, we saw minimal volume trading beyond Summer-24, with Winter-23 also struggling to attract liquidity.

Into the week, we saw prices ease amid high gas inventories and decreased Norwegian pipeline nominations, however, the main focus was still on Australian LNG strike negotiations. Near-term gas demand expectations were restated lower, with temperatures out to September expected to remain above seasonal average expectations. As a result, front-month and season contracts were slow to trade, settling at a modest day-on-day loss.

On Friday, UK Baseload power opened soft on the front three seasons with very little volume quoted. Additional maintenance work in Norway planned for this week saw gas flows to the UK from Norway curtailed. Meanwhile, in the prompt market, gas and power-added value with lower wind output forecasted for the near term.

At the beginning of this week, we have seen very few fundamental drivers in the UK power and gas market, with minimal volumes on the curve and TTF sentiment buoyed by the ongoing Australian industrial action. Any volume traded yesterday set a clear bullish signal, despite only 2MW clearing for Summer-24 and 1MW for Summer-25 in the UK Power market.