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Please click on the link below to view this weeks Market View, containing the net cost of Electricity and Gas for upcoming renewals. The report can be viewed here »

Please click on the link below to view this weeks Market View, containing the net cost of Electricity and Gas for upcoming renewals. The report can be viewed here »

Bearish Drivers

– North West Europe storages are forecast to end February at 316TWh (57%), which is close to the higher end of the 5-year range for this time of the year. This poses a bearish risk for a strongly oversupplied market in Summer 24.

– The January increase of the German neutrality fee that adds additional costs on flows to other countries has disincentivised a lot of exports keeping more volume domestically and contributing to a North West Europe looser balance.

– Demand destruction across UK domestic and Industrial sectors continues.

– Strong Norwegian and UKCS supply continues amid a REMIT-free environment.

Bullish Drivers

– Escalated hostilities due to Houthi attacks on merchant vessels force more companies to bypass the Suez Canal and go via the Cape of Good Hope instead increasing voyage time and costs.

– Potential for temperature forecasts to be revised colder than current forecasts lifting heating demand than earlier expected.

– Risk of unplanned outages on Norwegian and UK continental shelf.

– The sanctions on Arctic LNG by the US, appear to have shown greater effect than expected previous. We still expect the plant to export, but at a lower level.

– A cold spell in the US in mid-January, caused “freeze-off” of gas production, reducing feedgas flows to LNG plants for few days. This likely to translate into fewer arrivals to Europe (around 4.5 vessels) and our LNG send-out forecast is slightly lower month on month.

In January, gas prices declined in contrast to December, affirming the bearish pattern observed since October. This trend aligns with the favourable fundamentals indicating smooth navigation through the heating season, characterised by ample storage levels and a consistent supply.

The fluctuations this month were primarily driven by shifts in weather forecasts, impacting market sentiment in both bullish and bearish directions. Notably, the UK experienced prolonged cold spells compared to the Continent. Due to its smaller storage capacity, the NBP market reacted more sharply to these weather changes. Consequently, the spread between TTF and NBP Day-Ahead prices contracted, discouraging exports.

At the start of the year, there were concerns regarding UK LNG due to winter storms that restricted berthing at Milford Haven. It wasn’t until January
6th, after a two-week delay, that Dragon was able to accept a delivery and resume its send-out operations.

Geopolitical developments have had a relatively constrained impact thus far. The primary focus remains on the ongoing armed conflict in the Red Sea involving a US-led coalition and Houthi rebels. Houthis have been targeting ships in solidarity with Palestinians. Efforts to minimise disruption to global logistics have resulted in organised counter-attacks. However, these measures have not eased concerns, leading to the redirection of Qatari ships away from the Red Sea. Utilizing the alternative route around the Cape of Good Hope entails an approximately ten-day delay.

As we move into the latter part of February, market sentiment is anticipated to lean towards a bearish outlook, driven by European gas fundamentals. The
weather forecast suggests conditions will be mostly normal, albeit slightly cooler than the temperatures experienced last year.

The projected total LNG sendout for NWE&UK in February is 255mcm/d, which is 20mcm/d lower than last year and slightly less than January. This decrease is attributed to the current global shipping situation, which favours routes from the US to Europe due to extended wait times at the Panama Canal and the ongoing Houthi attacks in the Red Sea. Additionally, the impact of US sanctions on Russia’s Arctic LNG project and trans-shipment has been more significant than initially anticipated. Consequently, importers with agreements with Novatek have declared force majeure. However, it is still anticipated that the plant will continue to export, albeit at reduced levels.

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Planet First is excited to launch the Energy Advice Centre on 22nd February 2024.

The new centre will provide specialist support to people in nearby communities who struggle with rising fuel prices.

The Energy Advice Centre will be open to everyone, including surrounding businesses.

We are delighted to have gained local recognition from The Star and Bdaily.

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Please click on the link below to view this weeks Market View, containing the net cost of Electricity and Gas for upcoming renewals. The report can be viewed here »

Please click on the link below to view this weeks Market View, containing the net cost of Electricity and Gas for upcoming renewals. The report can be viewed here »

Please click on the link below to view this weeks Market View, containing the net cost of Electricity and Gas for upcoming renewals. The report can be viewed here »

Please click on the link below to view this weeks Market View, containing the net cost of Electricity and Gas for upcoming renewals. The report can be viewed here »

The business energy market can be challenging to understand.

Every month, our specialists create a Market Drivers report to keep your business updated.

We have highlighted Bearish drivers, expected to contribute to the market lowering, and Bullish drivers, expected to contribute to the market going higher.

Bearish Drivers

– North West Europe storages are forecast to end January at 415TWh (75%), a record high level for the time of the year. This poses a bearish risk for a strongly oversupplied situation in SUM24.

– Demand destruction across UK domestic market and Industrial sectors continues.

– Norwegian exports in December on the way to hit historical high with strong production likely to continue in January.

– LNG arrivals to North West Europe are expected to increase further January

Bullish Drivers

– Halt of the fuel shipment via the Red Sea by several companies including BP as Houthi attacks intensified.

– Potential for weather forecasts to be revised lower than current forecasts leading to stronger than envisaged heating demand.

– Industrial gas consumption saw an increase in December year on year reflecting on slightly improved manufacturing situation and fall in the prices incentivising the demand.

– Risk of unplanned outages on NCS and UKCS.

December was a relatively stable month for gas prices with the NBP trading notably lower at the end of the month and over 30% lower compared to November. This was amid strong storage levels in the UK and Europe which were able to contribute with stable withdrawals when needed in the recent cold snap. On the supply side both LNG and Norwegian flows remained strong, geopolitical risk has also ebbed with the market focus switching to bearish fundamentals.

These bearish fundamentals have kept European prices under steady pressure through December. The cold spell at the beginning of the month did not seem to have made the markets worry as we are moving closer to the end of winter. The bearish price trend has been shortly interrupted only by LNG-related events: the announcement of the delay of the Golden Pass LNG project in the US and the recent halt of the fuel shipment via the Red Sea by several companies including BP as Houthi attacks intensified.

Looking ahead, the expectation for the rest of January remain bearish. The latest weather forecasts suggests slightly above normal temperatures in January, though not as mild as last year.

Higher LNG arrivals into Europe should be boosted by supply from the Russian Yamal LNG following the closure of the norther sea route and the resort of exports from Egypt. The main LNG supplier to Europe sailing through the red sea is Qatar, it provides only around 5% of North West Europe LNG imports.

Forecasts suggest that January should end the month with aggregated NWE storage stocks at 415TWh (75%), remaining a record high for the time of the year. Assuming weather conditions in February and March are close to normal, the expectation is that NEW storages are at 56% full by the end of winter 23. This is a record-high level illustrating a notably bearish picture with storages at risk of being full by the middle of the summer season. Speculation suggests that even if we see an extremely cold Feb/Mar as
observed in 2018, we may still see storage ending March at 36% (slightly above the 5-year average), and should not pose any substantial risk for refilling storages ahead of winter 24.

Click here to discuss your business energy challenges.

Please click on the link below to view this weeks Market View, containing the net cost of Electricity and Gas for upcoming renewals. The report can be viewed here »