Market Insight
Tony Jordan
23 December 2022

Market Insights 23/12/2022

A bearish start to the week despite the cold temperatures which saw spot prices climb but have since calmed.

In a constantly changing outlook, the latest long term temperature forecasts now show a quick return to seasonal normal this coming weekend, which might feel like a heatwave after heavy snow in parts of the UK, and the temperatures now expected to stay close to seasonal normal until the end of January. This latest run will be a welcome view to the markets.

National Grid ESO, which had started yesterday with two coal-fired power plants warmed to be on standby, were later stood down as the market supply/demand balance were brought back into line after some scary price levels were seen in the day ahead and intra day markets.

Today is round (who knows!) of the EU talks on the price cap. With no progress made on this in recent weeks, due to a split in the EU27 view on how this could or should work, today sees another round of talks to make a decision on the subject. This comes as European Commission President Ursula von der Leyen warns Europe could fall some 30bcm short on gas storage next year.

Yesterday saw the TTF January contract settle at €136.59 (from €139.11) and the NBP January contract at 339.05p (from 345.91p).

Karsto remains on unplanned outage this morning and we see a flow level at 333mcm from Norway (335). Russian nominations showing Velke Kapusany at 43.4mcm (42.6) and Sudzha at 42.4mcm (42.4). Flows on Nord Stream are now a likely physical impossibility. Gas storage showing at 88.48% full as per AGSI+. LNG vessels due to arrive in UK next couple of weeks is 13.

This morning we see the January TTF contract at €136, NO CHANGE to the previous settlement. 

A quick check on some key contracts:
Curve TTF January €136, Summer €139 (vs €136 and €140)
Curve NBP January 339p, Summer 337p (vs 346p and 341p)
UK Gas NBP spot 365p (from 390p).
UK Power DA £388 (from £571).

UK power prices show the UK January Baseload contract at £400 (£440) and Summer at £300 (£304).

In other areas of the market Brent Oil is at $78 ($76) and EUAs are at €90 (€88). Henry Hub is at $6.59 ($6.25) and JKM is at $32.93 ($33.37).