The mild start to the heating season and a recovery in North Sea gas output from the end of seasonal North Sea oil field maintenance, has enabled gas inventories to continue building – now standing at nearly 73% full. Remarkably, the LNG send-out rate has picked up and is now within the range of recent years – though below this time last year. As well as being mild, the weather has also been rather still, leading to low wind generation.
Notwithstanding the improving inventories, concern in European energy markets has risen now that the heating season has started. Power and gas prices have increased sharply in Europe, converging with hitherto higher prices in Asia. Winter baseload prices have rallied back towards their highs and gas prices for this winter has also been advancing. The rally has also been felt further down the curve leading to new highs in a number of contracts.
While there are more and more stories about how energy flows from the Middle East have recovered, on Monday a Greek-flagged LNG carrier was hit while passing through the Strait of Hormuz. The vessel experienced only minor damage and was able to continue its journey, but this incident highlighted the risks. The outlook for the weather is to become cool though blusterier as more low-pressure systems move in from the Atlantic. Still, though cooler, temperatures may be above average for the time of year.
| Commoditiy | Front contract (£p/therm) | Summer 27 (£p/therm) | Winter 27/28 (£p/therm) | Summer 28 (£p/therm) |
|---|---|---|---|---|
| Price | 193.62 | 145.63 | 139.98 | 89.54 |
| Weekly Change | 10.54 | 15.12 | 14.53 | 7.24 |
| Commoditiy | Front contract (£/MWh) | Summer 27 (£/MWh) | Winter 27/28 (£/MWh) | Summer 28 (£/MWh) |
|---|---|---|---|---|
| Price | 156.65 | 115.01 | 115.51 | 76.62 |
| Weekly Change | 6.15 | 10.56 | 9.79 | 5.34 |
| Commoditiy | US Gas ($/mmbtu) | Brent ($/b) | EUA (€/MT) | UKA (£/MT) |
|---|---|---|---|---|
| Price | 3.26 | 100.20 | 85.25 | 62.57 |
| Weekly Change | 0.30 | -3.33 | 0.16 | 1.54 |
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