Market Insight
Tony Jordan
5 December 2022

Market Insights 05/12/2022

The bullish momentum continued yesterday as the colder weather forecast starts to take hold after a warmer than usual start to the winter season.

In Germany, the first of six floating LNG terminals has been finished with the others expected to be close behind as it races to replace the lost Russian piped gas. It is expected that, once complete, the floating LNG import capacity would account for around one-third of the countries demand.

Elsewhere, the expected (delayed) Freeport LNG restart is looking more likely it will be delayed further. There is much speculation that the ‘mid November’ start will not be met and that ‘early 2023’ is looking increasingly likely. This comes as it releases a report on the root cause failure analysis of the events on 8th June 2022.

Today will be the last day of the Ofgem January price cap observation period, before it is announced later this month. However the government price cap will continue to apply. Focus will then be on the potential outturn of the April price cap, which starts calculating tomorrow – the same day as the Chancellor announces his budget statement.

Yesterday saw the TTF December contract settle at €124.10 (from €113.70) and the NBP November contract at 298.95p (from 272.88p).

Asgard on unplanned outage this morning and we see a flow level at 299mcm from Norway (295). Russian nominations showing Velke Kapusany at 40.5mcm (41.2) and Sudzha at 42.4mcm (42.4). Flows on Nord Stream are now a likely physical impossibility. Gas storage showing at 95.60% full as per AGSI+. LNG vessels due to arrive in UK next couple of weeks is 15.

This morning we see the December TTF contract at €118, DOWN €6 to the previous settlement. 

A quick check on some key contracts:
Curve TTF December €118, Summer €129 (vs €124 and €120)
Curve NBP December 299p, Summer 297p (vs 273p and 277p)
UK Gas NBP spot 115p (from 95p).
UK Power DA £127 (from £107).

UK power prices show the UK December Baseload contract at £295 (£282) and Summer at £258 (£249).

In other areas of the market Brent Oil is at $94 ($93) and EUAs are at €77 (€75). Henry Hub is at $6.03 ($5.93) and JKM is at $27.79 ($27.23).

Be sure to quote the hashtag #auxilione if using any of our selected content or feel free to use the ‘repost’ option to ensure AUXILIONE is the source of the full post. Numbers in brackets show the previous reports value.