Last Week’s Pricing & Commentary  

Last week saw the market dominated by bearish sentiment as wind generation and wild temperatures helped to reduce gas demand across Europe. Weather forecasts continue to the driving force for movements in markets. Europe remains well stocked with gas as storage levels remain at around the 83% mark. Attention has now turned to the summer injection period with the market attempting to price in the need to attract LNG flows whilst assessing where European gas levels will be by the end of winter. Record wind generation in the UK has helped to push prompt and forward curves down with Feb-23 NBP and UBL falling 7.46p/therm and £17.40/MWh. Summer contracts were also weak, losing 15.33p/therm and £17.88/MWh respectively. Wind regularly generated above 15GW over the week with generation records broken on multiple days. Imports from France have also grown in recent weeks as their nuclear generation ramps up following the well-documented maintenance issues experienced pre-Christmas. UKAs and EUAs spreads grew last week as EUAs added 2.47/tonne whilst UKAs dropped £0.70/tonne in value. After a few weeks of bearish moves, Brent saw bulls return to the market as demand from China grew rapidly on the opening of the economy after covid-19 restrictions were relaxed by government.

Last Week’s Average Generation Stack

This Morning’s View

The UK is at the start of a mini cold spell, with temperatures dropping and gas demand increasing. However, the market is bearish this morning with Feb-23 and Winter-23 NBP contracts moving 10% lower in line with TTF.  The NTS is forecast 20.7mcm short today as consumption moves back in line with seasonal norms. Wind generation has decreased from the highs of last week, providing <5GW in the early hours this morning. Carbon has followed the moves down in gas with EUAs trading back below €80/tonne.

Wider news

UK to launch 'cash for plastic trash' scheme - Energy Live News.

UK private renters ‘could save £570 a year if ministers act on energy efficiency’

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