Market Insights 27/02/2025

DAILY MARKET REPORT – 27/02/2025

It has been a consistent downward trend since the highs seen on 10th February, with the last 11 of 12 sessions settling lower than the previous.

Much of this is down to some level of comfort being found after many weeks of upward trend caused by investment funds reducing their long positions, talks of peace agreements in Ukraine and the EUlooking at relaxing storage refilling plans.

Yesterdays session pushed downwards late in the session as news from the European Commission appear to show a review of the gas storage refilling plans. It is not expected to change the 90% target by 1st November, but the trajectory to how this is being achieved, perhaps with some more flexibility on the previously published values in an attempt to ‘calm the markets’. However a slowdown in the trajectory, which may already be viewed as a struggle, is likely to have the opposite effect unless underwritten by strong LNG arrivals throughout the summer.

On top of that, the US and Ukraine appear to have finalised a deal regarding the ‘rare earths’ and its respective presidents are due to meet in Washington tomorrow. The details and purpose of the deal remain somewhat confusing, however security guarantees (direct or implied) may be part of the deal in order to ‘grease the wheels’ of further peace talks with Russia in the weeks ahead.

All in all the market seems to have taken some comfort with the recent news stories and has quickly moved away from those highs seen just a couple of weeks ago.

Yesterday saw the TTF Front Month contract settle at €41.34 (from €44.29) and the NBP Front Month contract at 98.78p (from 105.98p).

Skarv remains on unplanned outage this morning and we see a Norwegian flow nomination level at 328mcm (328). EU gas storage showing at 39.93% (40.30%) full as per AGSI+. LNG vessels due to arrive in UK the next couple of weeks is 13 (12).

This morning we see the Front Month TTF contract at €42, UP €1 to the previous settlement.

A quick check on some key contracts (rounded to nearest whole):
Curve TTF Front Month €42, Front Season €42 (vs €41 and €45)
Curve NBP Front Month 99p, Front Season 99p (vs 106p and 106p)
UK Gas NBP spot 98p (from 105p)
UK Power Base spot £97 (from £103)

UK power prices show the UK Front Month Baseload contract at £87 (£89) and Front Season at £79 (£85).

In other areas of the market Brent Oil is at $73 ($73) and EUAs are at €71 (€72). Henry Hub is at $3.96 ($4.17) and JKM is at $13.49 ($13.86) with TTF Equiv of $12.74 ($13.62).

Numbers in brackets show the previous reports value.