Flagship Energy’s Tejal Shah Energy Markets Update – 20th March 2024

Tejal Shah, Head of Trading & Risk at Flagship Energy provides a market update

The bulls appear to have taken a hold with risk premiums in the UK and European gas markets continuing to rise. Prices are now back to where they were at the end of January/beginning of February. Unplanned Norwegian outages, slightly cooler temperatures and ongoing weak LNG arrivals to the UK are some of the factors contributing to the rise on the near term. In addition, the market is cautious about the developments in the Middle East as attacks in the Red Sea continue, as well as increased LNG interest from Asia. There has been a rise in JKM prices, the Asian gas benchmark, which could concern some European buyers should we need to compete for LNG cargoes. However, despite the lower LNG send outs and arrivals, demand is relatively muted. Gas consumption is significantly down versus this time last year and we continue to see steady UK and Norwegian flows. With plenty of gas in the storage, mild temperatures and increasing renewable generation, the demand for LNG is less than last year therefore many are questioning how long can the bulls sustain the upward momentum?

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