Market Insight
Tony Jordan
7 March 2023

Market Insights 07/03/2023


Markets started the week with an impressive downside being shown as we edge closer towards the end of the winter period and gain more confident in the year ahead.

Temperature forecasts show a significant dip to be expected tomorrow (8th March), which has been showing for some time, around six degrees below seasonal normal for the UK. It is then expected to be around two degrees above seasonal normal on 13th March before reducing back to around one degree below seasonal normal for the rest of March and into April.

As a result of the imminent ‘cold spell’ National Grid ESO yesterday afternoon, and overnight, issued an Electricity Margin Notice, instruct an asset to cease an outage and return to service as well as instructed several coal assets to warm up.

Morgan Stanley has lowed its outlook for gas prices for the rest of this year with an expectation of TTF prices to be as low as €35/MWh – which we’re not too far away from right now – so that demand can increase or LNG cargoes be diverted away from Europe. This shows some confidence in the rest of 2023 avoiding a repeat of events seen last year.

Yesterday saw the TTF April contract settle at €42.15 (from €44.98) and the NBP April contract at 105.66p (from 113.18p).

No unplanned outage this morning and we see a flow level at 313mcm from Norway (334). Russian nominations showing Velke Kapusany at 36.7mcm (35.9) and Sudzha at 42.3mcm (41.5). Nord Stream remains unavailable.  Gas storage showing at 58.93% full as per AGSI+. LNG vessels due to arrive in UK next couple of weeks is 12.

This morning we see the April TTF contract at €43, UP €1 to the previous settlement. 

A quick check on some key contracts:
Curve TTF April €43, Summer €43 (vs €42 and €46)
Curve NBP April 106p, Summer 108p (vs 113p and 115p)
UK Gas NBP spot 115p (from 125p).
UK Power DA £136 (from £137).

UK power prices show the UK April Baseload contract at £115 (£122) and Summer at £119 (£128).

In other areas of the market Brent Oil is at $86 ($86) and EUAs are at €93 (€92). Henry Hub is at $2.57 ($3.01) and JKM is at $14.29 ($14.33) with TTF Equiv of $13.22 ($14.00).

Numbers in brackets show the previous reports value.