Next week's edition of Panorama will be published on Tuesday 11th April, owing to the UK bank holiday.
NBP and continental near-curve contracts firmed slightly last week as forecasts suggested colder-than-average weather in the second half of April and as an unplanned outage curbed Norwegian exports for much of the week.
NBP D+1 prices averaged 40.38 p/therm last week— up 3.4% compared to the week before— but softened by Friday. The NBP May-June spread continued to widen, to around -1.05 p/therm at Friday’s close, with the NBP looking weak because of June fundamentals, with Rough offline and maintenance on the IUK halting UK exports.
Lower Norwegian exports provided some support for prompt prices last week. Aggregate Norwegian pipeline supplies were 2.23 bcm in the week to 9 April, down by 70 mcm w/w but still 30 mcm higher y/y. Since 3 April, an outage has cut production from Norway’s Kvitebjorn field by 6.2-11.9 mcm/d and is scheduled to continue until Wednesday evening (12 April).
Meanwhile, aggregate LDZ demand in Italy, France, the Netherlands, the UK and Belgium is forecast to rise to 2.79 bcm in the week to 16 April—up 0.56 bcm w/w and by 0.42 bcm y/y. LDZ demand is forecast to rise by another 0.54 bcm w/w in the week starting 17 April, as temperatures in parts of Northwest and Central Europe are forecast to dip below the seasonal norm from then.
Even so, near-curve contracts softened late last week as Russian flows to Europe rose and more LNG cargoes have been added to Northwest Europe’s delivery schedule. Russian flows had slowed in late March, registering consistent y/y declines for the first time since late summer 2016. Deliveries increased last week to 3.12 bcm, up by 0.46 bcm w/w and 0.31 bcm y/y. Lower temperatures and plenty of storage to fill—some 6 bcm this summer—could encourage nominations of Russian flows to remain brisk.
LNG deliveries to Northwest Europe also rose last week to 0.67 bcm, up by 0.22 bcm from the week before and 0.2 bcm higher y/y. Imports are scheduled to climb even higher next week to 0.68 bcm, which is 0.16 bcm higher y/y. This morning (10 April), there were several more Qatari vessels with undeclared destinations sailing from Ras Laffan towards Europe that could dock at Northwest European ports as early as next week.
Higher LDZ demand, the ongoing French nuclear outages, and low hydro levels across Europe should provide support for gas prices, keeping the market trading around the 15.81 €/MWh fuel-switching trigger. We expect another week of gas markets trading in a tight range around this trigger, with more potential for prices to drift up rather than down. However, healthy Russian nominations and more LNG imports should help limit upward movement.
|Last week's changes in European balances and short-term outlook, mcm|
|Source: Country SOs. GSE, Energy Aspects|