Market Insight
Tony Jordan
28 December 2022

Market Insights 28/12/2022

A soft market direction continued yesterday with prices at their lowest for a while.

Much of the discussion yesterday appeared to be on the European price cap and how ineffective it is likely to be. With several parties already citing how it can be avoided, particularly with the suspension of the cap based on a lack of liquidity in the market which of course can be controlled by trading parties reverting to OTC trading – which is excluded from the cap, it seems a lack of consideration as to the potential ‘loopholes’ could be present.

The European Commission yesterday approved Germanys €34.5bn bailout of Uniper, with around €8bn being delivered immediate to recapitalise the company.

Data is apparently showing activity at Freeport LNG, potentially good news on the horizon for a planned restart of exports from the plant after closure for several months following an explosion at the site during the summer.

Yesterday saw the TTF January contract settle at €105.69 (from €108.54) and the NBP January contract at 262.56p (from 270.07p).

No unplanned outage this morning and we see a flow level at 338mcm from Norway (328). Russian nominations showing Velke Kapusany at 39.4mcm (37.5) and Sudzha at 42.4mcm (42.4). Flows on Nord Stream are now a likely physical impossibility. Gas storage showing at 83.45% full as per AGSI+. LNG vessels due to arrive in UK next couple of weeks is 14.

This morning we see the January TTF contract at €99, DOWN €7 to the previous settlement. 

A quick check on some key contracts:
Curve TTF January €99, Summer €108 (vs €106 and €110)
Curve NBP January 263p, Summer 262p (vs 270p and 268p)
UK Gas NBP spot 225p (from 201p).
UK Power DA £178 (from £188).

UK power prices show the UK January Baseload contract at £298 (£298) and Summer at £244 (£250).

In other areas of the market Brent Oil is at $80 ($80) and EUAs are at €84 (€84). Henry Hub is at $5.33 ($5.85) and JKM is at $34.92 ($36.49).