Market Insight
Tony Jordan
16 June 2023

Market Insights 16/06/2023


In one of the most bizarre sessions of any recent period, yesterday saw traders scramble for reasons as to why gas prices were on the rise – touching as much as +30% to the previous day at one point – before retreating, almost fully, by the close.

As we’ve said for some time now, the market retains an extreme level of nervousness underneath a cover of ‘everything looks fine’ sentiment over the past few months, resulting in market prices reaching a two year low in recent days. Those levels doubled at one point yesterday with the UK Gas front month hitting over 124p/therm before retreating back to 98p by the close, but had been as low as 92p at one point – a near 33p/therm swing.

The reasons appear mixed, and mostly ‘copycat panic’ activity cited to Norwegian outage notifications which have been coming all week and confirmation that Groningen will permanently close at the end of the current gas year (Oct). This of course in conjunction with rumours of the ‘whodunnit’ reports for the Nord Stream attacks and associated threatened retaliations on Western communication lines from Russia. All likely pre-considered by traders to varying degrees of late, but once one goes bullish everyone follows!

Yesterday saw the TTF July contract settle at €41.15 (from €38.31) and the NBP July contract at 103.00p (from 95.51p).

Norne remains on unplanned outage this morning and we see a flow level at 256mcm from Norway (260). Russian nominations showing Velke Kapusany at 36.9mcm (36.9) and Sudzha at 41.7mcm (41.6). Nord Stream remains unavailable. Gas storage showing at 72.91% full as per AGSI+. LNG vessels due to arrive in UK next couple of weeks is 1.

This morning we see the July TTF contract at €39, DOWN €2 to the previous settlement.

A quick check on some key contracts (rounded to nearest whole):
Curve TTF July €39, Winter €56 (vs €41 and €53)
Curve NBP July 96p, Winter 147p (vs 96p and 138p)
UK Gas NBP spot 101p (from 96p).
UK Power DA £108 (from £97).

UK power prices show the UK July Baseload contract at £115 (£98) and Winter at £147 (£138).

In other areas of the market Brent Oil is at $76 ($73) and EUAs are at €93 (€93). Henry Hub is at $2.53 ($2.34) and JKM is at $13.69 ($9.40) with TTF Equiv of $13.19 ($12.19).

Numbers in brackets show the previous reports value.