Market Insight
Tony Jordan
17 January 2023

Market Insights 17/01/2023

An aggressively bearish start to the week to give us new lows not seen in some considerable time across the board.

It seems the lack of cold weather in the long term forecasts, supported by a string of LNG cargoes expected in the coming weeks and EU storage levels still above 80%, are giving markets the confidence that 2023 has an opportunity to be very different to last year.

Whilst this will be very welcome news to those businesses that are now looking into the market to purchase (or on spot pricing terms), it will not yet benefit domestic households who will need to wait until later in the year. That said, it is likely that suppliers may now have some confidence to reintroduce tariffs that are not linked to the governments support packages (because they are considerably lower) with the vast majority of consumers not tied to their suppliers.

In other news the EU are hoping to make their first ‘joint purchase’ of gas this summer. This followed news that on Friday ACER failed to publish its first LNG index due to a lack of qualifying data. These both form part of the EUs answer to living life without Russian pipeline gas into the future.

Yesterday saw the TTF February contract settle at €55.45 (from €64.81) and the NBP February contract at 136.76p (from 162.54p).

No unplanned outage this morning and we see a flow level at 330mcm from Norway (334). Russian nominations showing Velke Kapusany at 27.2mcm (29.8) and Sudzha at 32.8mcm (35.4). Flows on Nord Stream are now a likely physical impossibility. Gas storage showing at 81.49% full as per AGSI+. LNG vessels due to arrive in UK next couple of weeks is 20.

This morning we see the February TTF contract at €57, UP €2 to the previous settlement. 

A quick check on some key contracts:
Curve TTF February €57, Summer €58 (vs €55 and €67)
Curve NBP February 137p, Summer 145p (vs 163p and 168p)
UK Gas NBP spot 152p (from 168p).
UK Power DA £157 (from £152).

UK power prices show the UK February Baseload contract at £142 (£163) and Summer at £144 (£161).

In other areas of the market Brent Oil is at $84 ($85) and EUAs are at €78 (€80). Henry Hub is at $3.42 ($3.42) and JKM is at $20.17 ($20.17).

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