Market Insight
Tony Jordan
20 February 2023

Market Insights 20/02/2023


A bearish end to the week saw the Dutch TTF front month contract fall below €50, a level not seen since late 2021.

Whilst the market continues to show new levels of comfort, there are still around six weeks left of the winter period and temperatures are expected to drop below seasonal normal from the middle of this week and currently forecast to stay at or below seasonal normal until the end of March. We’re therefore not out of the woods just yet.

The Ofgem price cap calculation period for the upcoming April-June period has now closed. On Friday it was announced increased allowances for Covid impact would be included in the final cost announcement due next Monday. We expect a cost of around £3,200 to be announced, but are still finalising our calculations. Many will be wondering why, if the cost of energy has fallen in recent weeks the price cap will remain so high still. This is because the April-June period is calculated during the period of November to February and some of the period had high wholesale prices. It will not be until the July-Sept price cap period, which starts calculating today, that this will be seen by consumers.

Friday saw the TTF March contract settle at €49.05 (from €52.01) and the NBP March contract at 120.96p (from 129.51p).

No unplanned outage this morning and we see a flow level at 339mcm from Norway (314). Russian nominations showing Velke Kapusany at 33.5mcm (30.1) and Sudzha at 39.1mcm (35.8). Nord Stream remains unavailable.  Gas storage showing at 63.43% full as per AGSI+. LNG vessels due to arrive in UK next couple of weeks is 9.

This morning we see the March TTF contract at €50, UP €1 to the previous settlement. 

A quick check on some key contracts:
Curve TTF March €49, Summer €51 (vs €51 and €53)
Curve NBP March 121p, Summer 126p (vs 130p and 133p)
UK Gas NBP spot 123p (from 129p).
UK Power DA £111 (from £118).

UK power prices show the UK March Baseload contract at £139 (£138) and Summer at £133 (£141).

In other areas of the market Brent Oil is at $83 ($85) and EUAs are at €96 (€98). Henry Hub is at $2.28 ($2.39) and JKM is at $15.92 ($16.30) with TTF Equiv of $15.36 ($16.30).

Numbers in brackets show the previous reports value.