Prices ease amid relaxation of German gas storage targets
Wholesale gas prices eased across European gas hubs on Thursday after Germany signalled a relaxation of its gas storage rules.
The NBP near curve saw downside averaging 1p/therm (0.03p/kWh) day-on-day, perhaps mirroring moves on the Dutch TTF and Belgian ZTP as Germanys’ ruling coalition approved a motion to lower the country’s storage target from 90% to 80% by 1st November, which could cap pipeline exports from the UK to mainland Europe.
Norway’s next round of maintenance ramps up tomorrow, removing 71.17mcm of output, potentially feeding risk into the curve and curbing further reductions.
Similar reductions were observed across baseload power contracts as the prospect of slightly reinforced UK gas supplies is a positive signal to the power sector which relies on gas-fired power for a large proportion of its electricity generation.
Though wind turbine power recovered slightly yesterday, doubling from 2.5GW to 4.9GW, it is expected to remain muted over the bank holiday weekend.
In other news, US Vice-President JD Vance said in a Fox News interview that he believes the war in Ukraine is “not going to end any time soon” adding that “it’s going to be up to [Russia and Ukraine] to come to an agreement and stop this brutal, brutal conflict“.
These comments came just one day after the US and Ukraine signed a historical natural resources deal meant to bolster US support for Ukraine, an agreement that Ukrainian President Volodymyr Zelensky described as ‘truly equal’.
This apparent dissonance between US and Ukraine officials has the potential to feed an element of uncertainty into European energy markets, with a timeline for the end of the war still unclear.
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Price commentary courtesy of Crown Gas and Power 