European Gas Hub https://www.europeangashub.com Insights to the European natural gas industry Wed, 05 May 2021 13:02:46 +0000 en-US hourly 1 https://wordpress.org/?v=5.6.3 https://www.europeangashub.com/wp-content/uploads/2020/10/flavicon-European_Gas_Hub_logo-2.png European Gas Hub https://www.europeangashub.com 32 32 All gas price benchmarks record strong gains https://www.europeangashub.com/all-gas-price-benchmarks-record-strong-gains.html https://www.europeangashub.com/all-gas-price-benchmarks-record-strong-gains.html#respond Wed, 05 May 2021 13:02:46 +0000 https://www.europeangashub.com/?p=7193 A tighter summer gas market is shaping up, with all gas benchmarks recording strong gains in April and heading to multi-year highs. In the US, #Henry jumped by an impressive 48% yoy, despite domestic consumption falling more steeply than production. however, prices gained support from LNG exports ramping up by almost 50% yoy, driving up […]

The post All gas price benchmarks record strong gains first appeared on European Gas Hub.]]>
A tighter summer gas market is shaping up, with all gas benchmarks recording strong gains in April and heading to multi-year highs.

In the US, #Henry jumped by an impressive 48% yoy, despite domestic consumption falling more steeply than production. however, prices gained support from LNG exports ramping up by almost 50% yoy, driving up overall system demand for gas. net imports from Canada were up by 17%, providing support for AECO, gaining 55% yoy.

In Europe, TTF April prices more than tripled yoy, reaching their highest April average since 2014. cold temperatures and return of economic activity supported a staggering 45% yoy demand growth, while supply remained tight, with LNG inflow down by 4% and Russian exports to the EU increasing by a mere 3% yoy.

In Asia, JKM continued to gain strength, and similarly to TTF reached its highest April average since 2014. this has been largely driven by strong spot buying interest from China (+18%) and India (+38%). with JKM now climbing to above $9/mmbtu for June delivery, means that oil-indexed prices are becoming increasingly competitive for this summer…

What is your view? How will gas prices behave this summer? European storage inventories are now almost 30% below their 5-year average… the market is heating up!

Source: Greg MOLNAR

Connect with Greg on LinkedIn

The post All gas price benchmarks record strong gains first appeared on European Gas Hub.]]>
https://www.europeangashub.com/all-gas-price-benchmarks-record-strong-gains.html/feed 0
European gas demand jumps to record highs https://www.europeangashub.com/european-gas-demand-jumps-to-record-highs.html https://www.europeangashub.com/european-gas-demand-jumps-to-record-highs.html#respond Tue, 04 May 2021 15:02:59 +0000 https://www.europeangashub.com/?p=7161 Behind the sharp rise in European gas prices over the past few weeks, gas demand jumped to record highs in Apr-21. Unseasonably cold temperatures were the main driver, but industrial demand was back to its Apr-19 level as well. In the meantime, Asian LNG imports jumped by 11% yoy in Apr-21, mainly driven by a […]

The post European gas demand jumps to record highs first appeared on European Gas Hub.]]>
Behind the sharp rise in European gas prices over the past few weeks, gas demand jumped to record highs in Apr-21.

Unseasonably cold temperatures were the main driver, but industrial demand was back to its Apr-19 level as well.

In the meantime, Asian LNG imports jumped by 11% yoy in Apr-21, mainly driven by a strong increase in China LNG imports (+21% yoy)

Asian LNG prices

Source: Engie EnergyScan

Follow on Twitter:

The post European gas demand jumps to record highs first appeared on European Gas Hub.]]>
https://www.europeangashub.com/european-gas-demand-jumps-to-record-highs.html/feed 0
UK gas and power insights – week 18 https://www.europeangashub.com/uk-gas-and-power-weekly-insight-week-18.html https://www.europeangashub.com/uk-gas-and-power-weekly-insight-week-18.html#respond Tue, 04 May 2021 14:53:46 +0000 https://www.europeangashub.com/?p=7166 The June 2021 Gas price rose by 16.6% to 60.24p/therm last week as UK gas storage reaches critically low levels, currently sitting at 7.6% of capacity. With the UK gas system expected to remain short over the next few days there are concerns of gas shortages, which is driving up the price. The price of […]

The post UK gas and power insights – week 18 first appeared on European Gas Hub.]]>
The June 2021 Gas price rose by 16.6% to 60.24p/therm last week as UK gas storage reaches critically low levels, currently sitting at 7.6% of capacity. With the UK gas system expected to remain short over the next few days there are concerns of gas shortages, which is driving up the price.

The price of UK LNG has seen a significant rise as a result, with 18 shipments now expected over the next 7 days to maintain UK gas supply.

The June 2021 Power price also continued to climb significantly, gaining 11.3% to £69.68/MWh. The main drivers of UK power remain the meteoric rise of EU carbon and continued reductions in EU gas storage.

As gas shortages stretch across the EU, power providers have no choice but to use coal as a source of generation. The cost of carbon weighs far more heavily on, the more pollutant, coal-for-power generation. This cost is naturally passing through to the power market.

The Oct 2021 12 Month Gas price increased significantly last week, rising by 10.3% to 56.06p/therm. This is driven primarily by near-term price rises as the UK experiences a combination of very low storage and May weather expected to be far cooler than the seasonal norms.

The Oct 2021 12 Month Power price rose by 7.3% to £65.82/MWh, with continued, record-breaking, rises in the carbon market being the dominant driver. Additionally, the increasing percentage of the UK population being vaccinated and continued rises in UK energy demand will likely lead to increases in the price of power.

Source: BEOND GROUP

Follow on Twitter:

The post UK gas and power insights – week 18 first appeared on European Gas Hub.]]>
https://www.europeangashub.com/uk-gas-and-power-weekly-insight-week-18.html/feed 0
Gas up 45% in April https://www.europeangashub.com/gas-up-45-in-april.html https://www.europeangashub.com/gas-up-45-in-april.html#respond Mon, 03 May 2021 15:53:33 +0000 https://www.europeangashub.com/?p=7163 The great recovery: European gas demand jumped by a staggering 45% in April, its steepest yoy increase on record. Cold April temperatures, the coldest in 35 years according to measurements at De Bilt, propelled residential and commercial gas consumption, increasing by over 50% yoy on higher space heating requirements. Colder temperatures together with recovery in […]

The post Gas up 45% in April first appeared on European Gas Hub.]]>
The great recovery: European gas demand jumped by a staggering 45% in April, its steepest yoy increase on record.

Cold April temperatures, the coldest in 35 years according to measurements at De Bilt, propelled residential and commercial gas consumption, increasing by over 50% yoy on higher space heating requirements.

Colder temperatures together with recovery in economic activity supported higher electricity consumption, up by over 10% yoy. Most of the additional demand has been met by gas-fired power plants, swinging up their output by almost 60% compared to last year. The growth has been particularly pronounced in Turkey, where gas-fired powgen more than tripled yoy.

Industrial gas demand recovered strongly from last year’s lockdowns, up by 40% in Italy and 20% in France, further supporting European gas burn.

Meanwhile supply remained subdued, with LNG imports down, Norwegian pipeline flows flat and Russian pipeline imports up by a mere 5% yoy, leading to a robust growth in TTF, almost quadrupling from last year’s lows.

What is your view? What is next for European gas this summer?

Source: Greg Molnar

See original post Greg at LinkedIn.

The post Gas up 45% in April first appeared on European Gas Hub.]]>
https://www.europeangashub.com/gas-up-45-in-april.html/feed 0
Krk terminal an indicator of LNG market movements https://www.europeangashub.com/krk-terminal-an-indicator-of-lng-market-movements.html https://www.europeangashub.com/krk-terminal-an-indicator-of-lng-market-movements.html#respond Mon, 03 May 2021 15:47:17 +0000 https://www.europeangashub.com/?p=7157 This week, another tanker has arrived at the Krk LNG Terminal. The 63kt cargo delivered to the installation became just the fifth one since Jan, but even that quantity is enough to provide an understanding of how the global LNG market evolved in the first four months of ‘21. The Croatian FSRU became operational at […]

The post Krk terminal an indicator of LNG market movements first appeared on European Gas Hub.]]>
This week, another tanker has arrived at the Krk LNG Terminal. The 63kt cargo delivered to the installation became just the fifth one since Jan, but even that quantity is enough to provide an understanding of how the global LNG market evolved in the first four months of ‘21.

The Croatian FSRU became operational at the very beginning of this year, when suppliers actually lost interest in westward deliveries with LNG prices in the Asian region touching the skies. There was only one cargo imported to the Krk terminal between Jan and Feb, a few weeks before the chaos in Asia began.

As the JKM-TTF spread had tightened, more and more cargoes made their way to Europe, as can be seen from the imports to Croatia starting from late Q1. In Mar-Apr the country’s FSRU handled four ships, half of which were loaded in the US. Another one was re-exported from Zeebrugge, in contrast to early ’21 when most cargoes redirected from NWE ended up in Asia.

Krk terminal is certainly not the only one in Europe which serves as an indicator of LNG market movements. But if it takes quite a while to analyse larger installations, looking through Croatian imports can save you a lot of time. That is useful, isn’t it?

Source: Yakov Grabar

See original post by Yakov at LinkedIn.

The post Krk terminal an indicator of LNG market movements first appeared on European Gas Hub.]]>
https://www.europeangashub.com/krk-terminal-an-indicator-of-lng-market-movements.html/feed 0
LNG trade value to grow by 50% https://www.europeangashub.com/lng-trade-value-to-grow-by-50.html https://www.europeangashub.com/lng-trade-value-to-grow-by-50.html#respond Mon, 03 May 2021 15:12:29 +0000 https://www.europeangashub.com/?p=7154 Following a steep drop in 2020, the value of global LNG is set to grow by 50% this year to a record of close to $165 billion. LNG has been amongst the most resilient energy commodities in 2020, with trade volumes growing by ~1% despite global gas consumption declining by almost 2%. In contrast, the […]

The post LNG trade value to grow by 50% first appeared on European Gas Hub.]]>
Following a steep drop in 2020, the value of global LNG is set to grow by 50% this year to a record of close to $165 billion.

LNG has been amongst the most resilient energy commodities in 2020, with trade volumes growing by ~1% despite global gas consumption declining by almost 2%.

In contrast, the value of LNG dropped by ~25% as spot prices both in Asia and Europe fell to record lows in the first half of the year, while oil-indexed prices have been depressed to multi-year lows in the second half of the year.

In 2021, LNG trade is expected to expand by 4% yoy in volumetric terms to 500 bcm, largely driven by the recovery in Asia and supported by higher supply from the US.

Together with the surge in spot prices (almost tripling) and the firming up of oil-indexed prices the value of LNG trade is expected to increase by over 50% yoy to a record of $165 billion.

Of course downside risks in prices should be considered, even though market fundamentals have been tightening up for this summer…

What is your view? How will the value of LNG evolve? What does it mean for importers? And what are the prospects for project developers?

Source: Greg Molnar

See original post by Greg at LinkedIn.

The post LNG trade value to grow by 50% first appeared on European Gas Hub.]]>
https://www.europeangashub.com/lng-trade-value-to-grow-by-50.html/feed 0
European spot gas prices rebound https://www.europeangashub.com/european-spot-gas-prices-rebound.html https://www.europeangashub.com/european-spot-gas-prices-rebound.html#respond Tue, 27 Apr 2021 15:39:14 +0000 https://www.europeangashub.com/?p=7067 European spot gas prices rebounded yesterday, wiping out some of their Friday losses. Prices on the curve were more mixed as the impact of the slight increase in parity prices with coal for power generation was offset by the drop in Asia JKM prices. On the pipeline supply side, Russian flows were very slightly down […]

The post European spot gas prices rebound first appeared on European Gas Hub.]]>
European spot gas prices rebounded yesterday, wiping out some of their Friday losses.

Prices on the curve were more mixed as the impact of the slight increase in parity prices with coal for power generation was offset by the drop in Asia JKM prices.

On the pipeline supply side, Russian flows were very slightly down yesterday, at 328 mm cm/day on average, compared to 329 mm cm/day on Friday.

The same for Norwegian flows, which averaged 300 mm cm/day, compared to 302 mm cm/day on Friday (still significantly below the maximum of 348 mm cm/day of early April).

Source: Engie EnergyScan

Follow on Twitter:

The post European spot gas prices rebound first appeared on European Gas Hub.]]>
https://www.europeangashub.com/european-spot-gas-prices-rebound.html/feed 0
UK gas and power – week 17 https://www.europeangashub.com/uk-gas-and-power-week-17.html https://www.europeangashub.com/uk-gas-and-power-week-17.html#respond Mon, 26 Apr 2021 18:07:01 +0000 https://www.europeangashub.com/?p=7081 The May 2021 Gas price fell 0.8% to 50.72p/therm last week. Gains in oil prices early in the week caused upward pressure on the wider energy market before a well-supplied gas system meant prices ended the week lower. Healthy LNG send-out, supported by a high number of deliveries in April, and strong pipeline flows have […]

The post UK gas and power – week 17 first appeared on European Gas Hub.]]>
The May 2021 Gas price fell 0.8% to 50.72p/therm last week. Gains in oil prices early in the week caused upward pressure on the wider energy market before a well-supplied gas system meant prices ended the week lower. Healthy LNG send-out, supported by a high number of deliveries in April, and strong pipeline flows have helped bring down near term prices.

The May 2021 Power price continued to climb, gaining 1.3% to £61.43/MWh. Cooler forecasts and weak renewable generation, especially from wind, have provided support for power prices in recent weeks. At the end of last week, EDF announced a short delay in French nuclear facilities coming back online following maintenance, providing additional price support.

Gas and power prices also continue to be bolstered by carbon prices, which once again reached record highs last week.

The Oct 2021 12 Month Gas price was largely unchanged last week, falling 0.2% to 50.84/therm. European gas storage remained at around 29%, while UK Gas storage saw a small net injection, rising to 19%. Colder weather than normal is resulting in gas withdrawals later than previous years. This time last year, European gas storage was around 61% full.

European coal prices fell 2.6% last week as EU Carbon prices once again surged to record highs, discouraging consumption of fossil fuels. Milder temperatures in numerous European countries also led to weaker demand for coal by European power plants.

European carbon continued to break record highs last week, with a 5.7% rise to €46.86/tCO2 as EU member states and the European Parliament reached a provisional agreement on a European climate law.

The agreement confirms a collective net greenhouse gas emissions reduction target, after removals, of at least 55% by 2030 compared with 1990 but with a limit of 225 million tonnes of carbon dioxide equivalent on removals.

Source: BEOND GROUP

Follow on Twitter:

The post UK gas and power – week 17 first appeared on European Gas Hub.]]>
https://www.europeangashub.com/uk-gas-and-power-week-17.html/feed 0
Gas prices back to January levels! https://www.europeangashub.com/gas-prices-back-to-january-levels.html https://www.europeangashub.com/gas-prices-back-to-january-levels.html#respond Mon, 26 Apr 2021 17:14:55 +0000 https://www.europeangashub.com/?p=7070 Do you remember the last time when Europe saw average prompt prices in early summer climbing above Jan levels? There has not been such a thing since ‘18, when the average TTF DA was assessed in Apr some EUR1/MWh higher than the same product in Jan. Three years later in ‘21, a similar scenario is […]

The post Gas prices back to January levels! first appeared on European Gas Hub.]]>
Do you remember the last time when Europe saw average prompt prices in early summer climbing above Jan levels? There has not been such a thing since ‘18, when the average TTF DA was assessed in Apr some EUR1/MWh higher than the same product in Jan. Three years later in ‘21, a similar scenario is repeating itself.

As the causes of this month’s rise in gas contracts were being analysed multiple times, it may be interesting to look at the current developments from a different angle, by comparing with those a year ago.

Apr ’21 is the very opposite of Apr ’20 for the market, except perhaps in the area of LNG imports. This is largely due to the easing of Covid restrictions across Europe, but another thing is important in that context.

The significant difference in market environment, now and then, again unsettles many of our assumptions about the speed at which a once static commodity has been recently evolved. Not so long ago, the conditions could not have changed so drastically over the period of 12 months, but in today’s reality even months can make a difference. With decarbonization plans taking shape and pipeline vs. LNG competition intensifying, high volatility will likely be more common in the market.

Source: Yakov Grabar

See original post by Yakov at LinkedIn.

The post Gas prices back to January levels! first appeared on European Gas Hub.]]>
https://www.europeangashub.com/gas-prices-back-to-january-levels.html/feed 0
Storage spreads four times lower than last year’s levels https://www.europeangashub.com/storage-spreads-four-times-lower-than-last-years-levels.html https://www.europeangashub.com/storage-spreads-four-times-lower-than-last-years-levels.html#respond Wed, 21 Apr 2021 05:44:43 +0000 https://www.europeangashub.com/?p=7085 Gas storage at it best: despite the strong storage draws through the heating season, summer-winter spreads are tightening up, looming on the economics of storage facilities. As a result of a cold and prolonged heating season, European storage withdrawals increased by over 55% compared to the 2019/20 gas winter, whilst inventory levels have fallen now […]

The post Storage spreads four times lower than last year’s levels first appeared on European Gas Hub.]]>
Gas storage at it best: despite the strong storage draws through the heating season, summer-winter spreads are tightening up, looming on the economics of storage facilities.

As a result of a cold and prolonged heating season, European storage withdrawals increased by over 55% compared to the 2019/20 gas winter, whilst inventory levels have fallen now 20% below their 5-year average.

How did this translate in the perceived market value of gas storage?

The market value of seasonal storage is largely determined by the summer-winter spreads, i.e. the differential between front winter contracts and summer contracts.

Somewhat counterintuitively, the strong storage draws during the last heating season are now tightening up summer-winter spreads as low storage levels provide a greater support for the summer gas prices and hence reducing their discount vs winter contracts.

This is in sharp contrast with last year, when we saw storage spreads climbing to decade highs, as high inventory levels at the end of the heating season together with covid lockdowns depressed further summer contracts.

As such, storage spreads are now four times below their last year’s levels…

What is your view? What is the value of gas storage? And how should it be measured?

Source: Greg MOLNAR

Connect with Greg on LinkedIn

The post Storage spreads four times lower than last year’s levels first appeared on European Gas Hub.]]>
https://www.europeangashub.com/storage-spreads-four-times-lower-than-last-years-levels.html/feed 0