Overview
Europe continues its recent trend of milder winters, with above average temperatures heading into November. As a result, heating and power demand remain limited, keeping market prices rangebound. Markets have responded modestly to unexpected outages and maintenance across Europe, and strong fundamentals, such as robust global LNG availability have softened their impact. Geopolitical factors have offered little support; the ongoing war between Ukraine and Russia, including attacks on energy infrastructure, has had limited market impact this month. Trade tensions eased following a meeting between USA and China and could encourage optimism in the market.
Power
Season ahead power markets saw some uplift early October as a result of French Nuclear strikes and Russian’s attack on Ukraine, prompting increased gas demand. Though, overall bearish conditions continued throughout and season ahead contracts closed lower than September.
Gas
Gas storage levels across Europe have greatly improved, alleviating previous market worries, despite being at lower levels than in previous years. Global LNG exports are at record highs with both Europe and Asian pricing bearish, supporting supply requirements over winter. Attacks on Ukraine’s energy infrastructure could see further reliance on European imports, and see markets react, with up to 50% of gas production offline for much of winter.
Looking ahead
Winter risk will begin to play a role, with cooler temperatures forecast in the long term
Renewable output will also continue to dictate markets. Lower wind forecasts, currently balanced by mild temperatures into November
The Greenspan Agency produce this report on a best endeavours basis, and it has been supplied for your interest; the facts in this report should not be relied upon for decision making. If you have any queries about the content in this report, please contact bureau@greenspanenergy.com
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