Weekly Market Update - EU energy regulators failed to produce their first LNG assessment

Head of Sales Trading, Fanos Shiamishis reports on the energy market activity, covering the period 10th – 17th January 2023. On our end of day pricing tool, the Source, we published an in week high of £167.83/MWh for the Summer-23 seasonal power price on 10th January reducing to £144.24/MWh yesterday. In this blog Fanos shares the market news and updates from the last week. 

Last week, we saw European gas dip further on persisting mild weather and ample supply. The German storage lobby, Ines reported on 10th January that Germany has enough gas to refill its storage facilities before next winter even if LNG imports weaken and remaining Russian gas shipments end.

LNG deliveries were up slightly on 11th January and there were bearish sentiments in the market from mild weather, high inventory, and good LNG supply as well as weak gas demand. Summer 23 NBP has been trading in the 170-200ppth range this year, currently trading on the lower end of the range.

On Thursday, there was a colder revised weather forecast and less wind generation, but the overall outlook remained bearish. LNG freight rates dropped to a 4-month low, below $100,000/day with an increased availability of vessels as the numbers waiting around Europe to unload have reduced.

Yesterday, gas prices softened amid updated weather forecasts. Strong wind output and mild weather are expected. NBP front months and front two seasons decreased by 21-27 ppth, while power was down by £15-19/MWh.  EU energy regulators failed to produce their first LNG assessment due to insufficient data from market participants where only two transactions met the criteria. The price assessment by the EU Agency for the Cooperation of Energy Regulators (ACER) was created as the first step in the EU's plan to launch a new European benchmark piece for LNG, which Europe is switching to, to replace Russian pipeline gas.