Market Insight
Tony Jordan
16 August 2023

Market Insights 16/08/2023


Markets returned to bullish direction yesterday, this time with the curve travelling with the prompt delivery contracts.

Talks between unions and Australian LNG plant owners over strike action could take some time to resolve as any potential offers need to go back to workers for consideration.  This leaves the nervous sentiment on the table as we edge closer to the winter delivery period and the impact strike action could have.

Whilst EU gas storage levels are at a healthy 90%, LNG flows towards Europe have been on the low side this summer and any competition for delivery with Asian markets is always a bullish driver for Europe. With Australian LNG typically destined for Asia drying up with any strike action, those cargoes heading to Europe could be subject to a bidding war for the point of delivery.

Yesterday saw the TTF September contract settle at €38.81 (from €34.43) and the NBP September contract at 98.43p (from 86.83p).

No unplanned outage this morning and we see a flow level at 324mcm from Norway (327). Russian nominations showing Velke Kapusany at 36.7mcm (37.2) and Sudzha at 42.4mcm (42.3). Nord Stream remains unavailable. EU gas storage showing at 89.75% full as per AGSI+. LNG vessels due to arrive in UK next couple of weeks is 1.

This morning we see the September TTF contract at €42, UP €3 to the previous settlement.

A quick check on some key contracts (rounded to nearest whole):
Curve TTF September €42, Winter €53 (vs €39 and €49)
Curve NBP September 98p, Winter 138p (vs 87p and 127p)
UK Gas NBP spot 91p (from 81p).
UK Power DA £91 (from £83).

UK power prices show the UK September Baseload contract at £93 (£85) and Winter at £125 (£118).

In other areas of the market Brent Oil is at $85 ($86) and EUAs are at €87 (€88). Henry Hub is at $2.66 ($2.80) and JKM is at $14.73 ($11.15) with TTF Equiv of $12.44 ($11.03).

Numbers in brackets show the previous reports value.