Market Insight
Tony Jordan
12 December 2022

Market Insights 11/12/2022

An uptick in market prices yesterday.

Russias Gazprom announced on Telegram Messenger that it will likely reduce gas flows to Ukraine from Monday as it accused them of keeping gas intended for Moldova which it denies. This comes as military strikes on Ukrainian energy infrastructure is described as causing ‘colossal damage’.

National Grid ESO issued a capacity market notice for yesterday, which was later cancelled.

The European Union have now proposed a gas price cap on the TTF at €275/MWh for the month ahead contract to take effect from 1st January. This isn’t a straightforward cap however. It would only take effect if it breaches the price level and at the same time the difference between the cap and the price of LNG exceeds 55 Euro Cents for more than 10 consecutive trading days. The proposal will now be debated by the 27 countries.

Yesterday saw the TTF December contract settle at €119.64 (from €116.13) and the NBP November contract at 274.29p (from 268.99p).

No unplanned outage this morning and we see a flow level at 339mcm from Norway (319). Russian nominations showing Velke Kapusany at 41.7mcm (40.4) and Sudzha at 42.4mcm (42.4). Flows on Nord Stream are now a likely physical impossibility. Gas storage showing at 94.84% full as per AGSI+. LNG vessels due to arrive in UK next couple of weeks is 13.

This morning we see the December TTF contract at €127, UP €7 to the previous settlement. 

A quick check on some key contracts:
Curve TTF December €127, Summer €129 (vs €120 and €124)
Curve NBP December 274p, Summer 307p (vs 269p and 295p)
UK Gas NBP spot 124p (from 100p).
UK Power DA £126 (from £177).

UK power prices show the UK December Baseload contract at £282 (£270) and Summer at £273 (£258).

In other areas of the market Brent Oil is at $88 ($87) and EUAs are at €74 (€75). Henry Hub is at $6.78 ($6.78) and JKM is at $29.22 ($26.30).