Market Insights 20/09/2024

DAILY MARKET REPORT – 20/09/2024

A sizeable downward move was seen in yesterdays session as news broke that Ukraine had secured a deal to transit gas to Europe from Azerbaijan in replacement of the Russian gas it currently transits, which expires at the end of the year.

That news was later refused by several official lines which will see some of those falls unwound in todays session.

This shows that the market remains hyper sensitive to any news, good or bad, and will react accordingly. There has been some underlying concern around the Russian gas transit through Ukraine for some time, with Ukraine insisting it will not renew the deal when it expires at the end of the year. That may introduce some tightness to the market and so news of a replacement deal clearly removed some of the risk premium held in the market.

The market will now be watching closely for any formal follow up around such a deal as perhaps there is something in the pipeline – but it was leaked too early for officials to confirm.

Yesterday saw the TTF Front Month contract settle at €33.08 (from €35.25) and the NBP Front Month contract at 79.11p (from 84.28p).

Oseberg remains on unplanned outage this morning and we see a flow level at 220mcm (220) Russian nominations showing Velke Kapusany at 37.3mcm (37.3) and Sudzha at 42.3mcm (42.3). Nord Stream remains unavailable. EU gas storage showing at 93.41% full as per AGSI+. LNG vessels due to arrive in UK next couple of weeks is 3.

This morning we see the Front Month TTF contract at €35, UP €2 to the previous settlement.

A quick check on some key contracts (rounded to nearest whole):
Curve TTF Front Month €35, Front Season €35 (vs €33 and €38)
Curve NBP Front Month 79p, Front Season 88p (vs 84p and 94p)
UK Gas NBP spot 79p (from 84p)
UK Power Base spot £81 (from £80)

UK power prices show the UK Front Month Baseload contract at £68 (£70) and Front Season at £82 (£81).