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Market Drivers – December

We understand the business energy market can be challenging.

Our specialists compile a Market Drivers report each month.

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

  • Nord Stream 2 updates, namely the resumption of the certification process providing the NS2 AG project developer sets up a German subsidiary that is compliant with German law.
  • Gas for power demand is softer in both UK and NWE due to demand destruction caused by COVID and elevated wholesale prices.
  • Potential increase of non-committed cargoes to NEW considering Panama Canal waiting times and rising freight costs. The current high price may take some price sensitive buyers out of the market. An improving hydro balance in Brazil could see some diversions, one cargo has already diverted from Brazil to the UK.
    Bullish Drivers

  • Heavily reduced Russian supply and uncertainty to continue into Dec with no capacity booked at Mallnow. DA booking and DEC monthly auctions will influence sentiment.
  • Geopolitical concerns ramping up, opposition to NS2 growing, and the suspension of the certification process exacerbated supply worries.
  • NWE storage inventory remains at record low levels.
  • Stronger heating demand as we move into the cold period of winter, rising COVID restrictions can exacerbate LDZ demand as the number of those working from home increases.
  • Slower LNG send out compared to this month as Asian demand remains strong and we enter the peak winter period.
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