Market Insights 14/02/2025

DAILY MARKET REPORT – 14/02/2025

The ‘correction’ continued aggressively yesterday with around 8% fall in prices.

Mixed news including a potential start of talks around ending the conflict in Ukraine and EU gas storage rules ahead of next winter looking to push some of the fear out of the market.

Presidents Trump and Putin have spoken in recent days, and seems have already started bilateral discussions. NATO, European leaders and Ukraine itself now appear to be scrambling to show a united front and ensure they are at the negotiating table. Any deal agreed may include a redrawing of country borders, limiting NATO membership or allowing Russian gas to flow again as possible outcomes.

Yesterday talks also started around a potential relaxation of the gas storage refilling rules ahead of next winter as the current storage level trajectory shows this will be a demanding task over the summer which has led to a widening negative spread between summer and winter contracts until recently.

Both of these stories may well have pushed anyone sitting on a long position to now seek to exit and take their profit. Whilst there is no actual outcome of either story as yet, this may limit how far down the market will move.

Whilst that the downward movement is finally some news generally for the market, it won’t have any impact on the upcoming Ofgem domestic price cap which has now finished calculating for the Q2 period where it is expected a 5.5% increase to around £1,835 is to be expected. We will release our final forecast shortly.

Yesterday saw the TTF Front Month contract settle at €51.38 (from €55.66) and the NBP Front Month contract at 124.25p (from 134.99p).

No unplanned outage this morning and we see a Norwegian flow nomination level at 323mcm (319). EU gas storage showing at 46.57% (47.24%) full as per AGSI+. LNG vessels due to arrive in UK the next couple of weeks is 7 (7).

This morning we see the Front Month TTF contract at €50, DOWN €1 to the previous settlement.

A quick check on some key contracts (rounded to nearest whole):
Curve TTF Front Month €50, Front Season €51 (vs €51 and €55)
Curve NBP Front Month 124p, Front Season 123p (vs 135p and 134p)
UK Gas NBP spot 129p (from 139p)
UK Power Base spot £129 (from £131)

UK power prices show the UK Front Month Baseload contract at £103(£110) and Front Season at £95 (£101).

In other areas of the market Brent Oil is at $75 ($75) and EUAs are at €78 (€80). Henry Hub is at $3.63 ($3.57) and JKM is at $14.94 ($14.92) with TTF Equiv of $15.72 ($16.93).

Numbers in brackets show the previous reports value.