Market Insights 18/02/2025

DAILY MARKET REPORT – 18/02/2025

Further downward movement seen yesterday, pushing the TTF front month contract below €50 once again where it has remained above since the end of January.

Today sees the meeting of a face to face US and Russian delegation in Saudi Arabia to discuss the potential solutions for ending the conflict in Ukraine. Neither Ukraine itself nor European representatives are invited and appear to be managing their frustration (and concerns) in the public domain.

Speculation of what a deal may look like are wide and varied, and it may result in both Ukraine and Europe facing a ‘take it or leave it’ decision.

Will a deal include a relaxation on avoiding Russian gas, whether LNG or piped? That would certainly be a U-turn to the European plans and direction on stance built up over the last few years, although considerably likely to have the ability to depress market prices – much to the relief of consumers. But what would be the outcome if Europe stood firm and refused such terms? Would the US really withdraw from other ally memberships such as NATO? That would have potentially severe risks to European defence.

Any proposed deal is likely to be unpalatable for all sides – Europe will want no Russian advancement on Ukrainian territory and a continuation of European Union and NATO memberships. Russia will want the opposite and possibly to flow gas towards Europe once again. What will the US deem as a ‘fair deal’ – and what do they get out of it? The talks in the coming days and hours will be telling.

Yesterday saw the TTF Front Month contract settle at €48.14 (from €50.69) and the NBP Front Month contract at 115.72p (from 122.26p).

No unplanned outage this morning and we see a Norwegian flow nomination level at 327mcm (330). EU gas storage showing at 44.05% (44.61%) full as per AGSI+. LNG vessels due to arrive in UK the next couple of weeks is 12 (11).

This morning we see the Front Month TTF contract at €47, DOWN €1 to the previous settlement.

A quick check on some key contracts (rounded to nearest whole):
Curve TTF Front Month €47, Front Season €48 (vs €48 and €51)
Curve NBP Front Month 116p, Front Season 115p (vs 122p and 121p)
UK Gas NBP spot 117p (from 125p)
UK Power Base spot £109 (from £117)

UK power prices show the UK Front Month Baseload contract at £95 (£101) and Front Season at £89 (£91).

In other areas of the market Brent Oil is at $75 ($75) and EUAs are at €77 (€80). Henry Hub is at $3.73 ($3.73) and JKM is at $15.14 ($15.14) with TTF Equiv of $14.79 ($15.60).

Numbers in brackets show the previous reports value.