Pricewatch l 18 Jul 2023 I Gas Matters Today

The European gas market retreated again on Monday, following the improvement in flows from Norway after a prolonged period of outages as well as stronger wind power generation.

The pressure on the markets has eased as the Nyhamna plant’s maintenance came to completion and the facility was up and running from Saturday onwards.

In addition, high wind power output contributed to the price declines. Wind produced 51% of British electricity on Sunday, with the gas share falling to a mere 17.3%. The EU’s wind generation accounted for 22.6% of total power generation on Sunday, which fell to 16.7% on Monday.

TTF fell 3.3% to USD 8.27/MMBtu, while NBP declined 3.1% to USD 8.05/MMBtu. JKM remained flat on Monday at USD 11.87/MMBtu.

Meanwhile, the International Energy Agency (IEA) has warned in its latest report that Europe’s natural gas market still faces the risk of volatile prices this winter even though the worst in the continent’s energy crisis seems to be over.

“Major uncertainties remain ahead of the upcoming heating season. A cold winter, together with a full halt in Russia piped gas supplies to Europe early in the heating season, could easily renew market tensions,” the IEA said.

Earlier this month, Gazprom boss Aleksey Miller  threatened to cut gas flows via Ukraine if the country’s TSO proceeds with legal actions against the Russian major in the US.

Henry Hub also fell, by 1.1% settling at USD 2.51/MMBtu. The decline occurred despite lingering scorching heat as supply/demand imbalance concerns continue.

The Texan grid operator ERCOT said demand for power in Texas hit yet another record high on Monday, with usage at a preliminary 81,911 MW on Monday, which would top the current all-time high of 81,406 MW set on 13 July.

That is the fourth record high this summer and will likely be broken again on Tuesday with demand expected to reach 86,575 MW.

Oil dipped on Monday after weaker than expected Chinese economic growth raised doubts over the strength of demand, and a partial restart of halted Libyan output also pressured prices, Reuters reported.

This way, Brent fell to USD 78.5/barrel and WTI to USD 74.15/barrel, both down 1.7%.

Front-month futures and indexes at last close with day-on-day changes (click to enlarge): Time references based on London GMT. Brent, WTI, NBP, TTF and EU CO2 data from ICE. Henry Hub, JKM and API2 data from CME. Prices in USD/MMBtu based on exchange rates at last market close. All monetary values rounded to nearest whole cent/penny. Text and graphic copyright © Gas Strategies, all rights.