European Market Outlook…

Despite growing geopolitical tensions, markets are seeing a decline as participants factor in the currently confident supply outlook. Following three weeks of maintenance, the Kaarstoe processing plant is ramping up output. However, the anticipated ramp-up of supply could still be impacted by additional unforeseen delays.

Overall, the Norwegian maintenance period seems to be coming to a close with a relatively successful rate, as only a marginal number of plants extended past their expected return date. Temperatures are expected to decline, which in turn is anticipated to impact Europe in the coming days, increasing demand in alignment with a period of reduced renewable generation.

As geopolitical tensions persist, uncertainty surrounding Russian flows through Ukraine continues to be a focus for the majority of market analysts. There is, however, an element of reassurance as Ukraine reported that transportation of flows from Russia to Europe may be ongoing, despite historic agreements noting 2024 as an expected cut-off date.

Market analysts suggest technical support after a reduction in TTF prices, potentially creating a new floor price in relation to the recent downward momentum. Reduced demand has resulted in a decrease in European day-ahead prices.

In a similar outlook to gas prices in the UK, there is an expectation of increased volatility. However, fundamental supply metrics appear to provide a confident supply picture throughout the upcoming winter period.

*The Title Transfer Facility (TTF) is a market for natural gas in the Netherlands and is a fundamental benchmark for gas prices in Europe.

For a more detailed Pan-European energy market update please contact peter.leyland@gleg.co.uk or hello@gleg.co.uk.